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1 May 2009

Shareholders reject Thai KTC rights issue plan

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Shareholders in Krungthai Card (KTC) rejected a 7.74 billion baht ($219 million) rights issue plan on Thursay, forcing Thailand's top credit card issuer to look for other options to raise funds, reported Reuters.

The company would not be able to pay a dividend on its 2008 performance after the rejection, President Niwatt Chittalarn told reporters after a shareholders meeting.

"We can't get enough votes from shareholders. Some 31 percent of them voted against the rights issue and we need 75 percent to get it approved," Niwatt said.

Shareholders who rejected the plan included large foreign and retail investors, he said.

In March, KTC announced the rights issue plan to get working capital and repay debt, and expected to receive about 3.85 billion baht from its major shareholder, Krung Thai Bank, which has a 49 percent stake in the credit card firm.

Niwatt said KTC would sell bonds and seek loans from Krung Thai Bank, which said it would support the company.

Financial Chief Chutidej Chayuti said KTC planned to issue up to 10 billion baht in bonds this year, with the first lot of 2 billion baht to be sold in early May.

KTC also planned to sell bonds in October to refinance 3 billion baht in debt due the same month, Chutidej said.

The company has a 19 percent market share, with 1.6 million cards, and expects to add about 100,000 net new credit cards by the end of this year despire weak consumer confidence.

KTC's main rivals include the third-largest bank, Siam Commercial Bank, Kasikornbank, the fourth-biggest lender, the Thai unit of Citibank and Standard Chartered Bank (Thai).

The stock exchange halted trading in KTC shares in the afternoon pending the announcement on the rights issue.

The stock lost some of its earlier gains and was up 3.8 percent at 6.85 baht at 0816 GMT after trade resumed. It had jumped nearly 8 percent during the morning.



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