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Published on December 11, 2007

Advance Agro will list abroad following a voluntary delisting from the Stock Exchange of Thailand (SET).

The departure of the country's second-largest pulp-and-paper manufacturer and distributor illustrates the SET's loss of lustre.

"The company's major shareholder has a clear objective in delisting and listing abroad, because he considers the company can get a greater advantage on a foreign stock exchange in terms of funds raised, market capitalisation and share price," a company source said.

"The major shareholder believes listing abroad will be good for business expansion. The Thai stock market is getting smaller, so mobilising funds domestically to finance foreign business expansion may not be enough."

However, the source did not reveal where Advance Agro would list.

Advance Agro commenced trading on the SET in February 1995. As of last Thursday, its market cap was Bt20.1 billion. The company has paid-up capital of Bt5.32 billion, and it posted a net profit of Bt53.57 million for this year's third quarter.

Yothin Dumnerncharnvanich, whose family founded the company, has made an offer of Bt39 a share to aquire 532.38 million shares, or 99.99 per cent. Yothin is a director and shareholder

The source said the current price did not reflect fundamentals and that the stock had low trading liquidity.

"Based on company assets of Bt29 billion as of September, a share price of Bt37.75 does not reflect reality," the source said.

Apart from pulp and paper, Advance Agro has become involved in power generation and has three operating plants.

The source said the Dumnerncharnvanich family would borrow to pay for the tender offer. The family owns leading agricultural company Soon Hua Seng.

The offer is expected to cost it Bt20 billion.

The number of Thai companies listing abroad is increasing and this raises concerns. The stock market established an ad-hoc panel to study why, and work out ways to convince companies to remain in this country.

Mermaid Maritime, a subsidiary of Thoresen Thai Agencies and Indo Tambangraya Megahan, an Indonesian coal miner owned by Banpu, are among others seeking to list abroad.

Siriporn Chanjindamanee

 The Nation