Who says Thai Banks aren’t risk takers?
Well ok not all Thai Banks are risk takers, but this one line caught my eye in this morning’s paper.
Pace entered into an agreement for the purchase of one of the world’s most iconic gourmet food brands, Dean & DeLuca, as well as its global business and assets last November for US$140 million from Dean & DeLuca Holdings Inc in Wichita, Kansas.
Of the acquisition budget, $125 million was financed by Siam Commercial Bank, with the rest of the funding coming from Pace’s own equity.
Pace expects to earn revenue from Dean & DeLuca this year from sales at 11 US outlets and fees from new licensing agreements. This will account for 15% of net profit this year and rise to 50% of net profit in 2018.
Source: Bangkok Post
So this is PACE, that still has rubbish earnings (profits aren’t coming in any time soon), a relatively weak balance sheet (equity of THB 2 bn, total liabilities of THB 11bn as of 3Q14), but are still able to raise that much debt financing from SCB for this transaction.