Ngern Tid Lor Public Company Limited (SET: TIDLOR) is undergoing an organizational restructuring by establishing a holding company under the name of TIDLOR Holdings to improve the overall business operations within the group company.
TIDLOR Holdings will tender for the existing TIDLOR, which is scheduled to begin in the fourth quarter of 2024.
After the restructuring, TIDLOR will become a subsidiary of the Holding, overseeing the lending business. Meanwhile, the non-life insurance broker business will be transferred from the existing TIDLOR to a newly established company, which is a subsidiary of TIDLOR Holdings.
Following the establishment of TIDLOR Holdings, TIDLOR will be delisted, and TIDLOR Holdings will be listed under the same ticker “TIDLOR” on the same day.
The entire transaction is expected to be completed within the final quarter of this year.
CGS International (Thailand) wrote in a note, stating that the transformation of TIDLOR is similar to what SCB X has done with the restructuring of SCB Bank to SCB X Holding.
The rationale behind include 1) to foster and enhance efficiency for future growth in both lending and insurance brokerage (traditional + insuretech) 2) to remove the limit from Foreign Business Act (FBA) which currently strict TIDLOR (now in lending business purpose) to maintain loan to paid up capital ratio below 7x and eventually force TIDLOR to issue stock dividend every year. This is to reduce the investor’s confusion over dividend payment and enterprise as well as ROE trajectory in the future.
CGSI Thailand noted that there should be no impact to overall business operation and financial performance on a consolidated basis.
Meanwhile, the subjection of FBA could help TIDLOR to expand business better with no dilution impact from stock dividend moving forward.
CGSI Thailand commented that shareholders should accept the tender offer. Otherwise, there will be no liquidity in the market after share delisting and replacing by Holding company shares.
