Earlier in the month we posted that WHA and HEMRAJ was the deal that never happened, now things have taking a new turn…

What’s happened?
Over the weekend there was news that WHA would purchase the stakes of the majority shareholders of Hemraj (15% of HEMRAJ’s outstanding shares) @ a price range of THB 4.60-THB 4.80/share

The latest news is that:
Under their MOU, WHA expressed its intention to enter into the agreement to purchase the shares of Hemaraj offered by group of the major shareholder in the amount of 22.53 per cent of the total number of Hemaraj shares issued and sold, at the price of Baht 4.50 per share, around THB 9.8 bn.

How are they going to pay for this?
WHA’s D/E is around 3x, thus they are going to do a rights offering of THB 8.8 bn

Wait a minute?
Didn’t the SET/SEC say that they WHA & HEMRAJ couldn’t have a transaction for 6 months because both firms had denied it a few weeks ago? Thats what I thought too!

Potential Scenario?
1.) WHA takes the initial 22.53% stake
2.) After a 6 month period they will make a tender offer for remaining shares for control of HEMRAJ
3.) They will have to raise more capital, most likely another THB 10-15 bn

Source: SET