Bond market risks being hit after AJA scraps SABUY capital increase.

The bond market remains an area worth watching at all times. From defaulting on bonds or requesting a redemption period extension for many companies in the past such as Stark Corporation Public Company Limited or STARK, JKN Global Group Public Company Limited or JKN, Italian-Thai Development Company Limited ( Public Company Limited or ITD), All Inspire Public Company Limited or ALL

Recently, Energy Absolut Public Company Limited or EA requested an extension of the redemption due date. Along with the offer to increase interest during the said extension of the due date request in two tranches as well, EA248A was successfully passed, while EA249A did not meet the quorum. The vote should be postponed to August 23.

Recently, the bond market is still at risk of being shocked by the case of Sabai Technology Public Company Limited or SABUY, which raised capital through a limited offer for sale to a limited number of persons (private placement) by allocating additional ordinary shares of the company, amounting to 1.610 million shares, with a nominal value of 1.00 baht per share, to a limited number of persons. At the offering price of 1.00 baht per share

Divided into (1) 500 million additional ordinary shares granted to Ms. Kisara Luthongkam (2) 700 million additional ordinary shares granted to AJ Advance Technology Public Company Limited or AJA (3) 360 million additional ordinary shares granted to Holding L and (4) 50 million additional ordinary shares granted to Mr. Warit Yongsakul.

With this capital increase, SABUY will receive 1,610 million baht, hoping to use the funds to repay the debt on the Series 2 bonds due at the end of 2024, and to pay the interest on the Series 2-5 bonds, for a total of 1,250 million baht as compensation upon entering into a transaction pursuant to the Transfer and Receipt of the Full Business Transfer (Entire Business Transfer or EBT) of Holding L for an amount of 360 million baht.

But what about AJA, one of the four companies to which SABUY will offer additional shares? Instead, it has cancelled its investment in SABUY’s newly issued common shares based on the opinion of its independent financial advisor. The price at which the company will enter into this transaction is considered inappropriate and the board has considered and approved the opinion of the independent financial advisor. This is to prevent the company from having to bear the risks and implications of entering into such transactions.

The situation was repeated with Lightnet Pte. Ltd. (Lightnet) where Chatchawan Jiaravanont holds 69.54% of the shares, and Mr. Anonchai Veeraprawat, as well as Hiwell Global Co., Ltd., cancelled the investment in accordance with the capital increase plan.

However, SABUY continues to raise capital for other joint venture partners. Continue to enhance the financial liquidity of the Group of Companies. An additional 1.610 million ordinary shares of the Company were originally allocated to a limited number of persons (private placement), and an additional 910 million ordinary shares of the Company were allocated for private placement.

Divided into (1) 500 million additional ordinary shares granted to Ms. Kessara Lohthongkam (2) 360 million additional ordinary shares granted to Holding L and (3) 50 million additional ordinary shares granted to Mr. Warit Yongsakul

Therefore, SABUY will receive funds from the PP capital increase of 910 million baht, while the purpose of using the funds from the PP capital increase should be used to repay the debt on the bonds due at the end of 2024, Series 2, and to pay the interest on Series 2-5 bonds totaling 1,250 million baht, which is more than the funds received from the capital increase!!

It remains to be seen where SABUY will raise the money from. It could be the money received from exercising the rights under the warrants, in order to repay the bond debt. Or will you have to request an extension of your debt according to the regulations like others? Let's wait and see…

SABUY Q2/67 Budget – First Half of the Year Turns Big Loss

For the operating results in the second quarter of 2024, SABUY achieved a net loss of 2,914.6 million baht compared to the same quarter last year. With a net profit of 179.6 million baht, resulting in a net loss of 4,875.3 million baht in the first six months of 2024 compared to the same period last year. With a net profit of 346.6 million baht

This is due to SABUY having to sell investments in SBNEXT and AS in the second quarter of 2024 to reduce debts with securities companies. From the said event, SABUY recognized losses from the sale of investments totaling 602.35 million baht and realized losses from the loss of control over subsidiaries and associates totaling 1,400 million baht, including recognized loss from the impairment of goodwill and intangible assets amounting to 354.73 million baht for business groups that adjusted their business plans.