Cassava-based ethanol maker Ubon Bio Ethanol (UBE) has set a subscription price for its initial public offering (IPO) at 2.4 baht per share as it aims to raise 3.28 billion baht to fuel its shift towards value-added food production.
Up to 1.37 billion shares will be traded on the stock market, with investors able to subscribe for the shares from Sept 21-23, said Yodrudee Santatikul, senior executive vice-president of Asia Plus Advisory Co, an underwriter and financial adviser to UBE.
The first day of trading is scheduled for Sept 30.
Proceeds from the IPO will support UBE's transformation into a major producer of organic food using technology, said the company.
The company's long-term plan is a shift to a carbohydrate nutrient business, according to Daechapon Lersuwanaroj, managing director of UBE.
Part of the money will finance its 1-billion-baht capital expenditure budget, to be allocated between 2022 and 2024, he said.
UBE plans to spend 70% of the budget on organic flour production, 10% on new organic agricultural product development and 20% on expansion of ethanol production.
Mr Daechapon said the company wants to increase annual production capacity of organic cassava flour to 90,000 tonnes, up from 30,000 tonnes at present, to serve growing overseas demand.
UBE also plans to produce more organic sweetener syrup and improve production efficiency.
Making up 10% of capital spending, a new business will be set up to process coffee fruits and roast coffee beans, said Mr Daechapon.
In the ethanol segment, its annual production capacity will increase to 146 million litres, up from 130 million litres, to attain economies of scale, he said.
In the next five years, Mr Daechapon said, earnings before interest, taxes, depreciation and amortisation (Ebitda) from cassava flour, both native cassava grade and organic grade, is expected to increase to a rate of 65%, up from 27%.
Ebitda from ethanol will stand at 30%, a drop from 73%, while new organic agricultural products will make up 5% of Ebitda, he said.
Mr Daechapon said organic cassava flour has a profit margin of more than 36%, higher than the 11-13% of native cassava flour.
The company is scheduled to launch flour for making fritters in October and organic cassava-derived flour with distinctive characteristics such as low sugar content and high fibre next year, he said.
