SET-listed Jay Mart, a major IT product distributor, has expressed confidence its partnership deal with BTS Group Holdings could drive annual profit growth of 50% over the next three years.
Jay Mart said SET-listed Singer Thailand, its subsidiary that runs an electrical appliance distribution business with hire purchase plan, is expected to lead the segment in the next five years.
Jay Mart's subsidiary JMT Network Services Plc, which operates a non-performing debt management business, is projected to hold the biggest market share in the industry in the next three years.
Additionally, BTS aims to launch new services that will have business synergy with Jay Mart's digital token JFin coins early next year.
"The deal creates benefits for both parties in terms of financial and strategic aspects," said Adisak Sukumvitaya, chief executive of Jay Mart.
The board of Jay Mart last Thursday came up with various resolutions that pave the way for BTS's investment in the firm through BTS's subsidiaries VGI Plc and U City Plc.
VGI is an advertising, payment and logistics firm, while U City conducts the business of real estate development for lease, service, sales and management.
Jay Mart's board approved the allocation of 206 million new shares to VGI and 136 million new shares to U City at an offering price of 30.337 baht per share through both private placement (PP) investments worth around 10 billion baht in total.
After the deal, VGI and U City will hold 15% and 9.9%, respectively, of Jay Mart's total shares. The deal still has to be approved at Jay Mart's shareholders' meeting in late October.
SET-listed Singer agreed to allot 197 million new shares to U City through PP investment worth 7.1 billion baht.
Singer also approved the allocation of 96 million new shares to the existing shareholders through rights offering at an offer price of 36.3 baht per share. The move will generate 3.5 billion baht.
Additionally, JMT approved the allotment of 240 million new ordinary shares to existing shareholders through rights offering at the ratio of 4.558-5.042 existing shares to 1 newly issued share. The move is expected to raise 10 billion baht.
Mr Adisak said Jay Mart will use 10 billion baht it raises to buy new shares through rights offering issued by Singer and JMT, support working capital, reduce debt burden and support its mergers and acquisitions plan.
JMT plans to use the 10 billion baht it raises through the rights offering to acquire more bad debt for management and ease debt burden.
Singer will use almost 11 billion baht it raises through PP and rights offering to support its business, expand customer portfolio and branches as well as reach out to merger and acquisition deals.
According to Mr Adisak, the investment deals will generate a financial boost for the group, ranging from capital increase to credit rating boost, as well as create strategic drive, such as product diversification, customer base expansion as well as technology and fintech drive.
Kavin Kanjanapas, chief executive of BTS, said the deal serves the company's 3M strategy – Move, Mix and Match.
The Move concept lies in door-to-door transportation solution and Mix features comprehensive online-to-offline solutions combining advertising, payment and logistics services.
The company also focuses on sharing economy concept with a unique Match solution for partners, sharing access to its Move network and customers.
BTS and Jay Mart aim to work together to apply blockchain technology through digital tokens and JFin coins to BTS's business ecosystem, he said.
