Thai steel firm looks at LSE listing

Sahaviriya Steel Industries (SSI), Thailand's largest hot-rolled steel producer, may seek a listing on the London Stock Exchange in its bid to become an international company.

Once the US$500-million acquisition of UK-based Teesside Cast Products (TCP) is completed in the first quarter, almost half of SSI's assets will be outside Thailand, said president Win Viriyaprapaikit.

The purchase of TCP assets in northern England, including Europe's second-largest steel smelting facility and a port terminal, will give SSI the status of a Thailand-based transnational steel company and pave the way for its international expansion, he added.

"England is a country that has stable politics as well as laws and regulations," Mr. Win said. "Prospects are good for us to list on the stock exchange in the UK to raise funds from its capital market and we are going to study the options."

SSI's assets are worth 40 billion baht and will be enlarged to 190 billion baht following the acquisition, making the Thai steelmaker the largest of its kind in Southeast Asia.

The firm's earnings before interest rate, taxes, depreciation and amortisation will double to $50 million-$100 million a year with an aim to rise to $200 million in three to five years, staying on a par with those of its peers in Japan, Korea and China, Mr Win said.

Its debt-to-equity ratio will increase to more than 2:1 from 1:1 after the transaction, with a management target to bring it down to the current level within three years.

"We are in the final stage of completing the purchase and hopefully we will make it a done deal within one to two months," Mr. Win said.

SSI, which posted record shipments of 2.3 million tonnes of hot-rolled coils last year, projects its revenue to reach 50 billion baht this year, thanks to increasing local demand and rising steel prices.