Representatives from the Stock Exchange of Thailand (SET) will meet with executives of Dragon One Plc to clarify information about its plan to take over several other companies this year.

Dragon One executives must explain the company's acquisition plan because representatives of the SET feel it has disclosed too much information, said its vice president Sakkarin Ruamrangsri after the plan was released.

Chief executive officer Jrarat Pingclasai said yesterday morning that the company was planning to take over one new company per month in a bid to increase its assets as it transforms itself into a holding company.

Sakkarin said that because of Dragon One's recent backdoor listing, the company would have to choose one of the targeted businesses to serve as its core source of income. The SET requires listed holding companies to have a core source of income.

Dragon One will become a holding firm with registered capital of Bt300 million after it transfers its liabilities and assets to Diana Department Store Plc's shareholders later this month.

The company accomplished its backdoor listing when it recently took over Diana Department Store.

The core business is likely to be Application Hosting Services, which Dragon One is in the process of buying from International Engineering Plc for Bt269.98 million.

"The takeover of A-Host is the first step towards accomplishing our plan. According to SET regulations, a pure holding company must name a core company [contributing to the company's revenue] within 90 days to remain listed on the exchange. This deal appears to be a quick way to meet the market's requirement because the company has the same shareholder structure as we do.

"After Bunprasit Tangchaisuk sells his stake in A-Host, he will become Dragon One's second largest shareholder," Sakkarin said.

Bunprasit is the managing director of A-Host.

A-Host distributes and provides services related to computer programming. Its speciality is setting up IT systems and other supporting services for medium to large enterprises.

Sakkarin said that A-Host had posted continuous growth over the past five years and would contribute a steady stream of revenue to Dragon One.

The company will raise the proceeds to buy A-Host by issuing Bt130 million worth of capital-increase shares to existing shareholders and a further Bt40 million worth to specific investors.

Dragon One stock is expected to start trading in the communications sector by October, after it starts earning income from A-Host.

In addition, the company plans to completely write off its accumulated Bt228 million in losses this year, allowing it to start paying dividends next year.

Dragon One expects to hold about a 40-per-cent stake in a targeted firm to have management power, Sakkarin said.

"However, we will not change the management [of targeted firms] to allow for continuity," he said.

Siriporn Chanjindamanee

The Nation