BTS Group Holdings Public Company Limited (SET: BTS) announced a major restructuring plan earlier this morning, which approved VGI Public Company Limited (SET: VGI), its subsidiary, to raise capital via private placement to four investment funds.
VGI stated in a letter disclosed to the Stock Exchange of Thailand that the capital increase via private placement arises from the interest expressed by the 4 investors who have indicated their willingness to invest in the company. Currently, the company seeks to raise funds by issuing and offering shares via private placement due to the imminent expiration of its main revenue-generating agreements on granting the right to manage advertising space within 5 years, which is set to end in December 2029. As a result, the company aims to invest in projects related to or extending its existing business areas, including media and entertainment, digital services, and distribution.
Initially, VGI plans to use the proceeds from this capital increase to invest in projects in relation to the approval of licenses and the issuance of license to operate Virtual bank (Virtual Bank). The company will invest in the Virtual Bank directly or through the company’s subsidiary.
The investment in the Virtual Bank is expected to involve collaboration with other partners (Partners), with whom negotiations regarding shareholding proportions are still underway. The company does not expect to become the lead partner in this consortium and will hold no more than 25 percent interest. One of the key requirements from the Bank of Thailand for applying for a Virtual Bank license is that the applicant must have a paid-up capital of at least THB 10,000 million, with at least THB 5,000 million in paid-up capital at the initial stage of operations, in addition to sufficient reserve capital for operational management.
VGI believes that both the company and its partners are well-positioned to apply for a Virtual Bank license. The company has experience in finance and digital services through Rabbit Card and Rabbit Cash, and excels in integrating financial, data, and technological capabilities.
Additionally, the potential Partners involved in the licensing negotiations are highly capable investors. The company views having additional capital as a crucial factor and a significant opportunity to enhance confidence among partners in this joint venture. Initial investment and strong shareholder support are vital for establishing credibility with the public, customers, and depositors. Therefore, the capital increase is also essential for participating in this project.
However, VGI noted that if the company and Partners do not obtain the Virtual Bank license or if there are remaining funds from the project, the company will invest the remaining capital in other projects related to media and entertainment, and potentially other related or extending businesses, including media and entertainment, digital services, and distribution.
Additionally, VGI will invest in developing and enhancing entertainment systems in the Skytrain and various locations to modernize the services and provide greater convenience to customers utilizing the Skytrain services. The company will focus on investing in projects that build upon its existing expertise.
