Published on April 5, 2008
"Our minority interest in Padaeng meant we had limited influence over the company and due to Thai regulations would not have been able to secure control. Our decision to sell releases additional capital that can be better deployed elsewhere," said Paul Fowler, chief executive officer of UK-based Nyrstar.
With 24.6 per cent, Nyrstar had no management control. Any increase in its holding beyond 25 per cent would trigger a mandatory tender offer for the remaining shares, but Thai regulations restrict foreign ownership of natural resources to less than 50 per cent.
Nyrstar, the world's largest zinc metal and alloys producer, along with one of its founding shareholders, Belgium-based Umicore, sold 210.46 million shares in big-lot transactions at an average price of Bt30.65 - or Bt6.45 billion in total - on the foreign board.
The shares were sold to stockbroker Asia Plus Securities.
Trading in Padaeng's stock was halted at Bt34.75 in the morning and suspended in the afternoon.
Padaeng's board called an urgent meeting on the matter in the evening, according to an official. It is expected to clarify the progress of the transaction to the Stock Exchange of Thailand soon.
A market observer said the deal seemed to involve more than one investor. Analysts also kept an eye on whether the deal would boost Padaeng's performance.
Nyrstar said in a statement that it had agreed to divest its 24.9-per-cent minority shareholding in Padaeng to a consortium of investors for ¤34 million (Bt1.7 billion) in cash. The consortium of investors is represented by Asia Plus Securities.
Umicore said separately that it had unloaded its 22-per-cent shareholding for cash proceeds of some ¤30 million, which will result in a net capital gain of some ¤3 million on the book value of the stake.
Nyrstar said its shareholding had a book value of ¤50 million as of last December, based on Padaeng's share price at the time Nyrstar was established. The transaction will result in a loss of ¤16 million from the drop in Padaeng's share price since last August 31, as well as the decrease in the value of the baht against the euro, it added.