Saturday, August 28, 2010
BJC EYES CARREFOUR PARTNER
Berli Jucker Plc (BJC), the SET-listed trading company, may seek partners to join in the bidding for Carrefour's business operation in Thailand.
The company is considering using bank loans, raising equity or business partnerships to support the bid, said corporate finance manager Dusanee Therteppitak.
BJC's bid for the French hypermarket chain's assets worth 16 billion baht will help complete its consumer supply chain business.
"We're studying how we can improve Carrefour's profitability. Although we have no experience in the hypermarket business, we have one key success factor that modern trade should have. This factor is location and our shareholder, TCC Group, is very strong in this area," she said.
BJC has not heard anything new from Carrefour and bidding details and schedules rely on Carrefour's timetable.Miss Dusanee said BJC was also considering other channels such as convenience stores and discount stores to complete a consumer supply chain business that would reach more customers.
To finance the deal, Kittipong Rattanachaisit, assistant vice-president of BJC, said the company could acquire additional bank loans or leverage debt burdens up to 16 billion baht. It can also raise equity if debt financing does not provide enough.
As of June 30, its interest-bearing debt-to-equity ratio was 0.38 times and liability to equity at 0.81%. The company can increase its D/E ratio to 1.75 times under an obligation to bondholders that the company recently issued worth 4.56 billion baht.
For the first half of this year, the company reported sales of 12.27 billion baht, up 10.1% year-on-year. Net profit rose by 107% to 994 million baht.
The industrial supply chain business contributed 49% of total sales after its recent acquisition of additional glass factories. The consumer supply chain business contributed 31%, healthcare and technical products contributed 17%, and others 3%.
Mr Kittipong is confident operating results in the second half will meet their target.
BJC shares closed yesterday on the SET at 18 baht, up 60 satang, in trade worth 222 million baht.