Bank of Ayudhya (BAY), the country's fifth-largest commercial bank by assets, says it has no plans to downsize its 50% shareholding portion in Ngern Tid Lor Co Ltd, while the 50% deal in equity sales is expected to be completed in next year's first quarter.
On Oct 8, the bank announced it would sell a 50% stake in its wholly owned Ngern Tid Lor business unit to an international private equity consortium led by CVC Capital Partners Asia Fund IV and Equity Partners Ltd.
Sudargo Harsono, BAY's senior executive vice-president and head of retail and consumer banking, said there is no plan to reduce BAY's holding in the title loan refinance company to less than 50%, as the current 50% stake is appropriate.
The equity sales process is projected to be completed by this year-end or no later than next year's second quarter, Mr Harsono said, reiterating the bank will try to complete the deal within next year's first quarter.
"If the deal is completed by this year, we will recognise proceeds from the sales in this year's financial statements, but the process will be completed no later than next year's first quarter," he said.
New investment partners will help boost Ngern Tid Lor's business expansion going forward, Mr Harsono said.
Ngern Tid Lor, whose name means "Money on Wheels", is among the Thai consumer lenders that are seeking to tap growing credit demand in Southeast Asia's second-largest economy, Bloomberg reported.
The company, which provides credit and insurance to underbanked and self-employed people, has outstanding loans of 25 billion baht and 750 branches, according to a Ngern Tid Lor statement.
The executive structure of Ngern Tid Lor will not be altered after the equity sales, with no changes made to the executives or the company's name, Mr Harsono said.
Although both Ngern Tid Lor and Krungsri Consumer have their own nanofinance licence, BAY does not believe there is redundancy in terms of revenue generation, therefore there is no plan to put Krungsri Consumer's nanofinance licence up for sale, he said. Nor does the bank plan to sell its shares in Krungsri Asset Management, said Mr Harsono.
