TPI Polene Plc has raised Bt12.18 billion - short of its target of Bt16.78 billion - from selling 1.27 billion newly issued shares through a rights issue and a private placement.

The company had planned to issue about 1.67 billion capital-increased shares.

Of these, 807.5 million were allocated to existing shareholders at a ratio of one new share for each share held at Bt10 each, and the remainder to specific investors through private placement at a price of Bt10.15 apiece.

The cement producer said in a filing with the Stock Exchange of Thailand yesterday that its existing shareholders subscribed to 377.02 million of the 807.5 million shares earmarked for the rights offer.

However, the 807.5 million shares were fully taken up in the end as TPI Polene's founders the Leophairatana family subscribed to those remaing.

For the shares earmarked for private placement, only 404 million were sold, and there are 453.77 million shares remaining.

Of the 404 million subscribed shares, 402 million were bought up by the Leophairatana family and the remainder by Kitti and Nara Vongchingtrong.

TPI Polene's board will meet to consider what to do with the remaining new shares.

The stock yesterday closed down almost 2 per cent, at Bt10.10.

The company earlier said all the capital raised will be used to trim its outstanding debt to Bt7.11 billion.

Kim Eng Securities (Thailand) Plc said that TPI Polene's fund-raising exercise boosts its registered paid-up capital to Bt20.19 billion from Bt8.10 billion, and the Leophairatana family would more than double their equity stake in the company from 22 per cent to 49.9 per cent.

The capital injection will reduce TPI Polene's total debt from Bt28.45 billion to Bt16.45 billion, saving the company about Bt960 million in annual interest expenses, based on interest of 1.5 per cent on top of the minimum lending rate of 8 per cent.

Despite the company's healthier financial position, TPI Polene's earnings outlook in the second half remains poor due to a fall in cement demand as a result of the construction industry slowdown, as well as the recent high energy costs.

TPI Polene's bottom line in the second half, however, will be boosted by extra gains of about Bt2.54 billion from its debt restructuring programme, Kim Eng Securities said.

The broker has maintained its "hold" recommendation on the stock with a fair value estimate of Bt14 per share.