Capital reduction&increase,amend MOA,debentures,amendAOA,EGM
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(-Translation -)
Ref. BTS 2272/2010
September 3, 2010
Subject: Capital reduction & increase, amend MOA, issue debentures, amend
Articles and call EGM no. 2/2010
To: President
The Stock Exchange of Thailand
Enclosure: Capital Increase Form (Form F53-4)
Whereas BTS Group Holdings Public Company Limited ("the Company") had the
Board of Directors' Meeting No. 8/2010 on September 3, 2010 at 14.30 hrs. The
Meeting passed the significant resolutions which will be further proposed to
the shareholders' meeting for consideration and approval as follows:
Executive Summary
Matters Principles and Rationale
1. Reduction of registered The Company has
capital of the Company from approximately Baht 4.6 Billion
Baht 65,142,190,902 to Baht retained loss and approximately
41,691,002,177.28 and the paid- Baht 16.8 Billion share discount
up capital of the Company from in its separate financial
Baht 55,889,275,885 to Baht statements. According to the
35,769,136,566.40 by reducing law, the Company can make
the par value of shares from dividend payment only when it
Baht 1 per share to Baht 0.64 makes profits and has no
per share retained loss. The reducing
paid-capital resulting from the
par reduction will be used to
written off the share discount
and retained loss. The reduction
of retained loss would create the
ability of the Company to make
dividend payment to the
shareholders in the future. The
Company's plans to make good
of retained loss are by means of
(i) capital reduction, (ii)
dividend income from
subsidiaries, and/or (iii) other
operating profits.
2. Issuance and offering of Being an alternative for funding
convertible debentures and/or which could reduce the
debentures in the amount up Company's interest expense
to Baht 10,000,000,000 or in from loan facilities with the
the equivalent amount of other commercial bank incurred from
currencies the acquisition of Bangkok
Mass Transit System Plc.
("BTSC"). At present, the
Company still has
approximately 8,753.7 MB
outstanding loan and carries
rather high floating interest rate.
The reduced interest expense
shall result in high liquidity,
more stable financial status of
the Company, more flexible
manner in managing cash flow
and higher generation of
operating result.
3. Reduction of the registered To enable the Company to
capital of the Company in the increase the registered capital in
amount of 4,225,914,569 shares, order to accommodate the
at the par value of Baht 0.64 per conversion of the convertible
share, from the existing debentures, as required by
registered capital of Baht Section 136 of the Public
41,691,002,177.28 to Baht Company Limited Act B.E.
38,986,416,853.12, by canceling 2535 (as amended).
the Company's unissued shares
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4. Increase of the registered To issue up to 16,302,867,837
capital of the Company by Baht new ordinary shares of the
10,433,835,415.68, from the Company to (1) accommodate
existing registered capital of the conversion of the
Baht 38,986,416,853.12 to Baht Company's convertible
49,420,252,268.80 by issuing debentures and (2) offer to the
16,302,867,837 newly issued shareholders of BTSC
ordinary shares at the par (excluding the Company).
value of Baht 0.64 per share
5. Amendment of the Articles of To accommodate the conversion
Association of the Company of convertible debentures by the
foreign investors by restricting
the shareholding of all non-Thai
persons to up to 30 percent. For
the proportion in excess of 30
percent but not over 49 percent,
such shall be reserved for the
conversion of convertible
debentures.
The details of significant resolutions
1) Resolved to propose for the consideration and approval of the
shareholders' meeting to
(1.1) reduce the registered capital of the Company from Baht
65,142,190,902 to Baht
41,691,002,177.28 and the paid-up capital of the Company from Baht
55,889,275,885 to
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Baht 35,769,136,566.40 by reducing the par value of shares from Baht 1
per share to
Baht 0.64 per share and (1.2) amend Clause 4. of Memorandum of
Association of the
Company to be in line with the reduction of the Company's registered
capital and paid-up
capital.
2) Resolved to propose for the consideration and approval of the
shareholders' meeting to
amend Agenda Item No. 8.2 (3) of the resolution of the Extraordinary
General Meeting
of Shareholders No. 1/2010, held on April 29, 2010 in order to amend the
amount of
shares issued to accommodate the exercise of the warrant representing
right to purchase
the Company's newly issued ordinary shares and the par value of shares of
the Company,
by replacing "To allocate up to 5,111,610,256 newly issued ordinary
shares of the
Company at the par value of Baht 1 per share" with "To allocate up to
5,027,000,448
newly issued ordinary shares of the Company at the par value of Baht 0.64
per share".
The amendment of Agenda Item No. 8.2 (3) of the resolution of the
Extraordinary
General Meeting of Shareholders No. 1/2010, held on April 29, 2010
because (1) the
reduction of the registered capital and paid-up capital of the Company by
reducing the
par value of shares from Baht 1 per share to Baht 0.64 per share; and (2)
at the present
the Company has already determined an actual amount of warrant
representing right to
purchase the Company's ordinary shares at 5,027,000,448 units.
3) Resolved to propose for the consideration and approval of the
shareholders' meeting for
the issuance and offering of convertible debentures and/or debentures in
the aggregate
amount of up to Baht 10,000,000,000 or in the equivalent amount of other
currencies.
The details of the convertible debentures and/or debentures are as follows:
1) Details of convertible debentures
Type : Convertible debentures in name
certificate form or issued to bearer
which grant the right to convert into
ordinary share(s) of the Company
Offering Size : Not exceeding Baht 10,000,000,000 or
its equivalent amount in other currencies
Term : Not exceeding 5 years from the issue
date
Exercise Period : Approximately 30-45 days or working
days after the issue date to 15 days or
working days before maturity date,
except during closed periods which is in
accordance to the terms and conditions
of the convertible debentures approved
by the Company
Conversion Ratio : Principal amount of the convertible
debentures divided by the conversion
price
Initial Conversion : To be calculated from the market price
Price of the Company's shares traded on the
SET during the period before the date of
price determination plus premium.
However, the conversion price maybe
adjusted downwards at a certain rate or
method to be determined. Accordingly
the Board of Directors or Executive
Committee shall be empowered to
determine the conversion price and
market price.
Number of Ordinary : Not exceeding 12,500,000,000 shares
Shares Reserved for
the Conversion
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Allocation Method : Foreign investors and/or domestic
institution investors. The issuance and
offering can be made in foreign
currencies or Thai Baht currency and on
one occasion or several occasions.
Impact on : In the case all the debentures are fully
Shareholders exercised, the Company expects that:
Price Dilution
The impact on the market price of shares
(price dilution) will not incur or will be
minimal because the Conversion Price is
not less than the prevailing market price
at the time the convertible debentures
are issued.
Control Dilution
In the case where all the conversion right
under the convertible debentures is
exercised, the number of shares arising
from such exercise will be up to
12,500,000,000 shares. After combining
such shares arising from the conversion
with the existing shares, including
ordinary shares after the capital increase
for the group of specific investors who
are the shareholders of Bangkok Mass
Transit System Public Company Limited
and the exercise of warrants (BTS-W2),
the total shares of the Company, after
the conversion right under the
convertible debentures is being
exercised, will be equal to up to
77,219,144,170 shares. Therefore, the
voting rights of the existing shareholders
will be reduced by up to 12,500,000,000
/ 77,219,144,170 or up to 16.19 percent
of the paid-up capital after the capital
increase.
Events Requiring : Upon the occurrence of circumstances as
the Company to prescribed in the Notification of the
Issue New Shares to Capital Market Supervisory Board
Accommodate a relating to the Application for and
Change of the Approval of Offer for Sale of Newly
Exercise of Issued Debentures.
Conversion Right
In addition, such events shall also
include the event that shares reserved to
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accommodate the exercise of conversion
right under the convertible debentures
are insufficient due to the occurrences
such as the adjustment of conversion
price.
2) Details of Debentures
Type : Debentures in name certificate form or
issued to bearer, subordinated or
unsubordinated, secured or unsecured
debentures and with or without
debenture holder representative
Offering Size : Up to Baht 10,000,000,000 or in the
equivalent amount of other currencies
Par value : Baht 1,000 per unit
Term : Not exceeding 5 years from the issue
date
Allocation method : To be offered domestically and/or
overseas to the public and/or institution
investors and/or specific or general
investors, on one or several occasions.
Early redemption : The debenture holders have or do not
have the right to request the Company
for early redemption of the debentures
and/or the Company has or does not
have the right to redeem the debentures
prior to maturity, as agreed and
prescribed in the terms of debentures at
each issuance.
And resolved to propose to the shareholder's meeting to empower the Board
of
Directors and/or the Executive Committee to consider the market condition
upon
the issuance and offering of convertible debentures and/or debentures so
as to
provide the best interest to the shareholders, and to consider the economic
situation, advantages and disadvantages and overall interest of the
Company and
the shareholders upon the issuance and offering of convertible debentures;
And resolved to propose to the shareholder's meeting to empower the Board
of
Directors and/or the Executive Committee to take the following actions:
a) to determine or amend the details, procedure and other conditions
related
to the issuance and offering of convertible debentures as it is
deemed
appropriate, such as the issue date, par value, offering price,
interest rate,
calculation and payment method of interest payment, conversion
ratio,
exercise period, redemption period, the last date for exercise of
right, or to
determine events requiring the Company to issue new shares to
accommodate a change of the exercise of conversion right and
conditions
for adjustment of rights;
b) to determine the details and other conditions in connection with the
issuance and offering of debentures such as determination of
interest rate,
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offering method, amount of debentures to be issued and
offered on each
occasion, type of debentures, security, offering price per
unit, maturity,
redemption period, early redemption, payment method of
principal and
interest, allocation method and details on the offering; and
c) to enter into negotiations, agreements and execution of
agreements,
documents, applications for permission and necessary
evidence required in
relation to the convertible debentures and/or the
debentures, as well as to
communicate and submit such applications for permission
or waiver,
documents and evidence to the relevant authorities or
agencies concerning
the issuance and offering of convertible debentures and/or
debentures and
the listing of convertible debentures and/or debentures on
domestic or
overseas secondary stock exchange.
4) Resolved to propose for the consideration and approval of the
shareholders' meeting to
(4.1) cancel the allocation of 4,225,914,569 newly issued ordinary
shares, and (4.2) to
reduce the registered capital of the Company in the amount of
4,225,914,569 shares, at
the par value of Baht 0.64 per share, from the existing registered
capital of Baht
41,691,002,177.28 to Baht 38,986,416,853.12, by canceling the Company's
unissued
shares, and (4.3) to amend Clause 4. of Memorandum of Association of the
Company to
be in line with the reduction of the Company's registered capital.
As at present, the Company has a plan to issue and offer the convertible
debentures in the
aggregate amount of up to Baht 10,000,000,000 as detailed in the item no.
3). As a result,
it is required that the Company increases its registered capital. In
addition, according to
Section 136 of the Public Company Limited Act B.E. 2535 (as amended), the
Company
may increase the amount of registered capital by the issuance of new
shares when all the
shares have been completely issued and paid up in full; therefore, in
order to comply with
the law, the Company shall cancel the allocation of the said
4,225,914,569 newly
ordinary shares and cancel such unissued shares, by reducing the
registered capital of the
Company.
The 4,225,914,569 newly issued ordinary shares remained unallocated and
yet to be
allocated consist of:
(1) 84,609,808 shares which are a part of the 5,111,610,256 newly
issued ordinary
shares to which the Company has allocated to accommodate the
exercise of right
under the warrants. At present, the Company has already determined
the actual
amount of the warrants representing right to purchase the
Company's ordinary
shares (BTS-W2) to be issued at the amount of 5,027,000,448 units
and,
therefore, the Company is required to reserve 5,027,000,448 newly
issued
ordinary shares to accommodate the exercise of right under the
warrants while
84,609,808 shares are no longer required.
(2) 338,436,924 shares which are the shares remained as a result of
(i) the unallocated
portion to the existing shareholders due to the fraction from
calculation and the
revoked rights shares (i.e. 295,736,313 shares) and (ii) the
leftover portion
available to offer to the group of financial institution investors
or the group of
clients of securities companies who are the Company's underwriters
(i.e.
42,700,611 shares).
(3) 3,802,867,837 shares which are to be allocated to the group of
specific investors
who are the shareholders of BTSC at a price of not less than Baht
0.60, as
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approved in Agenda Item No. 8.3 of the resolution of the
Extraordinary General
Meeting of Shareholders No. 1/2010, held on April 29, 2010.
5) Resolved to propose for the consideration and approval of the
shareholders' meeting
(5.1) to increase the registered capital of the Company by Baht
10,433,835,415.68, from
the existing registered capital of Baht 38,986,416,853.12 to Baht
49,420,252,268.80 by
issuing 16,302,867,837 newly issued ordinary shares at the par value of
Baht 0.64 per
share, and (5.2) to amend Clause 4. of Memorandum of Association of the
Company to
be in line with the increase of the Company's registered capital.
6) Resolved to propose for the consideration and approval of the
shareholders' meeting to
allocate the Company's newly issued ordinary shares as follows;
(6.1) To allocate up to 12,500,000,000 newly issued ordinary shares at
the par value of
Baht 0.64 per share in order to accommodate the exercise of
conversion right at
the aggregate value of up to Baht 10,000,000,000.
(6.2) To allocate up to 3,802,867,837 newly issued ordinary shares at the
par value of
Baht 0.64 per share at the price of not less than Baht 0.80 per
share to the group
of specific investors who are BTSC shareholders (excluding the
Company) whose
name are in the list of shareholders as of the date the Company
issues the new
ordinary shares under this Agenda item, provided that such persons
are not the
connected persons of the Company, as a consideration for such BTSC
shareholders using their ordinary shares held in BTSC as the
substitute of cash
payment for subscription price for the newly issued ordinary shares
of the
Company. The offering price of these newly issued ordinary shares
is not lower
than 90 percent of the market price.
"Market Price" means the weighted average of the Company's share
price trading
on the Stock Exchange of Thailand ("SET"), 15 consecutive trading
days prior to
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