KEX Undergoes Restructuring and Capital Increase Amid High Competition in the Market

Following a restructure of its major shareholders, Kerry Express (Thailand) Public Company Limited (SET: KEX) shifted to being held by S.F. Holdings Company Limited from China, through S.F. International Holding (Thailand) Company Limited. Consequently, the company rebranded itself as KEX Express (Thailand) Public Company Limited.

KEX announced a huge capital raise, bringing it to nearly THB2,300 million from the previous THB 890 million. This increase was achieved through the issuance of 2,818.50 million new shares, with 2,812.50 million shares allocated through a rights offering at a ratio of 0.6196 old shares to 1 new share, priced at THB 3.20 per share, totaling THB 9,000 million.

The newly issued shares will be accessible for booking and purchase from August 21st to 27th, 2024, while the remaining 6 million shares are set aside for adjustments related to the ESOP Warrants project.

The augmentation of registered capital provides KEX with financial flexibility, enabling the allocation of the initial THB 3,240 million to clear its short-term and long-term debts totaling THB 3,237.91 million in the first quarter of 2024. Furthermore, around THB 5,760 million can be utilized as working capital for the company.

Despite the capital increase, uncertainties persist about the future direction of KEX, given the fiercely competitive nature of the logistics sector in Thailand. E-commerce in Thailand has experienced a significant surge, propelling the sector on an upward trajectory since the onset of the COVID-19 pandemic. Alongside the fierce competition in delivery speed, companies are also engaged in price wars to secure and expand their market shares.

With the high competition in the sector, it is hard to say whether existing shareholders will fully subscribe to the newly issued shares, but the major shareholder, SF Express, has made it clear that it will inject capital through this rights offering.