BGC Drops 51% in a Week in Concerns of Suspected Cap Increase for Business Acquisitions

The share price of BG Container Glass Public Company Limited (BGC) continued to drop further in concerns of the company’s decision to raise capital to acquire three businesses, which are BGC’s connected person, with an aggregate transaction value of not more than 3,978 million baht.

 

As of 12:16 local time in Thailand, the share price of BGC plunged ฿0.55/share or 6.29% to ฿8.20/share with a trading value of 44.3 million baht.

BGC’s share price fell dramatically on October 16, 2020, the day after the announcement for three acquisitions. The share dropped 51% since the announcement.

 

After the trading hour on October 15, 2020, BGC announced that its Board of Directors had approved the resolution to propose to the Extraordinary General Meeting of Shareholders on December 15, 2020, to approve the acquisition of shares in Bangkok Visypak Company Limited, BG Packaging Company Limited, and Kabinburi Glass Industry Company Limited, from Bangkok Glass Public Company Limited, which is considered as entering into material transactions deemed as acquisition of assets and a connected transaction.

The Boards also considered and approved the increase of BGC’s registered capital, from THB 3,472,220,000 to THB 5,489,244,740, by issuing 403,404,948 new ordinary shares with a par value of THB 5.00 each.

 

BGC stated that the sources of funds for the transaction will comprise loan from financial institution(s), capital increase and the company’s internal cash flow.

 

Bangkok Visypak reported a total income of 618 million baht in 2017 with a net profit of 9 million baht. 2018’s profit was 11 million baht before experiencing a loss of 0.78 million baht in 2019. While revenue for the first six months of this year was 319 million baht with a net profit of 20 million baht.

BG Packaging’s 2017 revenue was 505 million baht, while net profit stood at 18 million baht. In 2018, total income was 1,001 million baht with a net profit of 46 million baht. In 2019, income was 964 million baht and profit was 48 million baht. For the first six months of 2020, the company recorded an income of 444 million with a net profit of 25 million baht.

Kabinburi Glass Industry had a revenue in 2017 of 226 million baht with a net loss of 26 million baht. In 2018, revenue was 1,522 million baht with a net loss of 173 million baht. In 2019, the company posted a sharp loss of 244 million baht with an income of 1,611 million baht. Meanwhile the revenue for January – June period in 2020 was 632 million baht and the net loss was 147 million baht.