JMART Settles the JV Deal with Korean Top Financial Group, Issuing 2 Series of Warrant

Jay Mart Public Company Limited (JMART) has announced the resolution of the Board of Directors to approve the joint venture of J Fintech Co., Ltd. (JMART’s sbusidiary) with KB Kookmin Card Co., Ltd. (KB), a subsidiary of Korean’s leading financial business group, KB Financial Group.

 

The resolution has approved the entering into the Master Transaction Agreement and the Shareholders Agreement; and the capital increase of J Fintech from THB 556,536,900 to THB 1,112,851,210 by issuing 53,360,768 ordinary shares and 2,270,663 preferred shares, having a par value of THB 10 per share and offering the newly issued shares to all shareholders of J Fintech in proportion to their shareholding (both ordinary and preferred shares) at THB 11.68 per share, whereby JMART will waive the right to subscribe the newly issued shares in proportion to its shareholding in the company (either ordinary or preferred shares). The waiver by company will enable KB to subscribe all newly issued shares totaling 55,631,431 shares

After the completion of the capital increase, JMART will hold 45.09% of total issued and outstanding shares of J Fintech, having voting rights equivalent to 44.19% of total voting rights of the subsidiary. Therefore, the subsidiary will no longer be a subsidiary of JMART.

The waiver of right to subscribe to newly issued shares in the Subsidiary is considered as a disposal of assets as prescribed in the Notification of the Capital Market Supervisory Board No. ThorJor. 20/2551 re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets.

After the completion of capital reduction, J Fintech will conduct the capital increase, having the details as mentioned above. The shareholding structures of J Fintech after the capital reduction and after the capital increase areas follows:

 

As for the waiver for the right to subscribe 50,159,487 newly issued shares in J Fintech, having a par value of THB 10 per share and offering price at THB 11.68 per share, totaling 586.1million baht, JMART will receive the repayment of loan amount from J Fintech in accordance with conditions as agreed in the Master Transaction Agreement, having a total value of THB 2,717.5 million as of end of 2019. Therefore, the total value of consideration is 3,303.6 million baht.

KB will fully pay for the newly issued shares as of the Closing date (which is expected to be completed within June 2020 subject to the fulfillment of conditions precedent of the parties). In addition, KB and J Fintech will procure the loans from financial institutions or other lenders to replace the existing shareholder loan. If procurement of loan for the existing shareholder loans repayment does not occur within the agreed time period, KB, JMART and JMT shall provide financing to J Fintech in proportion to their respective shareholding in the subsidiary within 6 months from the Closing Date.

 

The joint venture with KB will award JMART leveraging financial knowledge and technology introduced by KB, the business partner which has expertise in the financial service sector, to enhance business of group companies in the long run.

Moreover, JMART is able to mitigate financial risk in operating business in the future since the company will receive the repayment of loan amount from J Fintech. In addition, the synergy between JMART and the leading global financial service company will support the potential business operation in the financial service industry in Thailand.

 

KB Kookmin Card Co. Ltd. operates credit card Issuing businesses. The company provides payment services, financial services, installment financing and leasing, and other services. The company is a subsidiary of KB Financial Group, a leading financial company in South Korea as a holding company. KB Financial Group presides over KB Kookmin Bank, KB Kookmin Card, KB Investment & Securities and KB Life Insurance.

 

Aside from the joint venture, the Board of Directors also approved the revision of the features of Warrants to purchase ordinary shares of Jay Mart Public Company Limited No.3 (JMART-W3)and Warrants to purchase ordinary shares of Jay Mart Public Company Limited No.4 (JMART-W4) which will be proposed to the Annual General Meeting of the Shareholders for the year 2020 as follows:

1) The exercise price is revised from Baht 14.00 per share for JMART-W3 and Baht 18.00 per share for JMART-W4 to Baht 11.00 per share for JMART-W3 and Baht 15.00 per share for JMART-W4.

2) The first exercise date is revised from the last business day of March or June orSeptember or December after the warrant issuance date to the last business day of September 2020.

Apart from that, approved to set the date fixed to determine the names of shareholders who are entitled to receive JMART-W3 and JMART-W4 on 12 June 2020 (Record Date). Nonetheless, such a period is still uncertain until it has been approved by the shareholders’ meeting.

 

The Annual General Meeting of the Shareholders of the year 2020 is scheduled to be held on 4 June 2020,14:00 hrs., at Head Office, 189 JMART B Building, Second Floor, Ramkhamhaeng Road, Rat Phatthana, Saphan Sung Bangkok.