Posted on 17 Aug 2022
Thailand-listed steel company 2S Metal Public Company Limited says it will acquire a 27.27% stake in United Steel Pipe Co., Ltd. (USP).
2S Metal proposed to shareholders to consider and approve the acquisition of 1,500,000 newly issued ordinary shares of USP with a par value of THB 100 ($2.82) each, representing 27.27% of USP's issued and paid-up share capital. This would be at no more than THB 229.41 per share, not exceeding THB 344,115,000 in total, Kallanish learns.
The purpose of the investment in USP, which operates steel manufacturing and distributing business with its production base in Samut Prakan Province, is to expand 2S Metal's customer and production bases. These are currently limited within the south and the northeast, to cover the central, the western, the eastern and the upper southern areas.
The company also aims to increase its product variety as well as storage and distribution capacity in central Thailand. It will thereby secure stronger bargaining power when purchasing raw materials and achieve economies of scale.
This is considered a related party transaction between the two companies. Sombat Leeswadtrakul holds 19% of USP's paid-up registered capital and also serves as an authorised director, executive director and shareholder of 2S Metal in a 19.05% stake.
After 2S Metal obtains approval from the shareholders' meeting on 29 September, the transaction is expected to be completed within the first quarter of 2023.
Source:Kallanish
