Stecon Power Company Limited (STECP), a subsidiary company in which Sino-Thai Engineering and Construction Public Company Limited (SET: STEC) holds 99.99% of the shares, has acquired 51% of the shares of Mars Water Supply Company Limited, which is in accordance with the criteria of the Stock Exchange of Thailand’s announcement on Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, B.E. 2547. The Company would like to inform the information of the said transaction as follows:
- Transaction Date
The Company acquired 765,000 shares in Mars Water Supply Company Limited, representing 51 % of all its shares, on October 2, 2024
- Involved parties and relationships between the Listed Companies
Related parties
Buyer: Stecon Power Company Limited
Seller: C123 Construction Company Limited, Pace Interior Services Company Limited, Marinethai Holding Company Limited
Relationship with listed company: Stecon Power Company Limited is a subsidiary of STEC, in which STEC hold 99.99% of its shares.
All three sellers are not connected persons of the Company or STECP in any way.
- General characteristics of the transaction
Asset purchased: Mars Water Supply Company Limited
Number of shares purchased: 765,000 shares
Percentage of shares purchased: 51 percent of the paid-up registered capital of Mars Water Supply Company Limited
Investment value: 317,063,957.35 baht, calculated from the following information:
| Seller | Percentage of
shares purchased |
Volume of
shares purchased |
Purchased price
(Baht) |
| C123 Construction Company Limited | 35.77% | 536,550 | 227,946,292.35 |
| Pace Interior Service Company Limited | 12.23% | 183,450 | 70,000,000 |
| Marinethai Holding Company Limited | 3.00% | 45,000 | 19,117,665 |
| Total | 51% | 765,000 | 317,063,957.35 |
Calculation of the transaction value
STECP acquired shares in Mars Water Supply Company Limited in the proportion of 51 percent of the paid-up registered capital, totaling 317,063,957.35 baht, which is considered as an acquisition of assets in accordance with the Capital Market Supervisory Board Announcement No. TorJor. 20/2008 on the criteria for making significant transactions that are considered acquisition or disposal of assets (including the amended announcement) and the Stock Exchange of Thailand announcement on Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition and Disposition of Assets, B.E. 2547
Details of calculation of transaction size.
Calculation based on the value of net tangible assets (NTA) criteria:
= ((NTA* of investment in the company x Proportion of assets acquired or disposed) x 100) / NTA of the listed company
= (148.447.147.69 x 51% x 100) / 17,453,249,000
= 0.4337
Calculation based on net operating profits
= ((Net operating profits of the investment x Buying or selling ratio) x 100) / Net operating profits of the listed company
= (-1.419.981.4 x 51% x 100) / 376,291,851
= -0.1924
Calculation based on total value of consideration paid or received
= (Value of transaction paid or received x 100) / Total assets of listed company
= (317.063.957.35 x 100) / 47,927,846,000
= 0.6615
Calculation based on value of equity shares issued for the payment of assets:
Not applicable as no securities were issued
The highest transaction size is 0.6615%, when including the transaction this time and the asset acquisition transaction that occurred in the past 6 months before the transaction this time, the value is still less than 15 percent of the total asset value of the Company, thus, not subject to reporting the acquisition of assets as announced above. However, the Company is required to disclose information on the transaction to the Stock Exchange of Thailand in accordance with the Stock Exchange of Thailand Regulations on the Criteria, Conditions and Methods for Disclosure of Information and Any Operations of Listed Companies B.E. 2560.
- Details of the assets acquired
Asset characteristics: Common stock of Mars Water Supply Company Limited
Number of shares: 765,000 shares, representing 51 percent of the paid-up registered capital.
Share value: Average price is 414.462 baht per share, equivalent to 317,063,957.35 baht
Mars Water Supply Company Limited, registration number 0205564020616, was established on July 1 , 2021 , currently with a registered and paid-up capital of 150,000,000 baht, divided into 1 ,500,000 ordinary shares with a par value of 100 baht per share. The office is located at 17/17, No. 7, Huai Kapi Subdistrict, Mueang Chonburi District, Chonburi Province. The company is engaged in the business of water supply and distribution for household and industrial use through the water supply system.
Mars Water Supply Company Limited is a company that has signed a contract to sell clean water for industrial use with the Industrial Estate Authority of Thailand (EAT) to procure water source to sell to Bangpoo Industrial Estate in a minimum quantity of 22,000 cubic meters per day for a contract period of 25 years, as Bangpoo Industrial Estate uses an average of 28,000-30,000 cubic meters of tap water per day. Also signed a contract to procure water source to distribute to Lat Krabang Industrial Estate in a minimum quantity of 14,000 cubic meters per day for a contract period of 25 years, as Lat Krabang Industrial Estate uses an average of 22,000-25,000 cubic meters of tap water per day. Mars Water Supply Company Limited is currently implementing projects in both industrial estates and is in the process of constructing a low-pressure pumping station, a clean water production station, and laying water pipelines. In addition, Mars Water Supply Company Limited has a water purchase contract with Nakhon Luang Industrial Estate with a minimum quantity of approximately 3,000 cubic meters per day in which the project is currently in the process of selecting a contractor to construct the project.
List of shareholders of Mars Water Supply Company Limited before the acquisition of shares by STECP consisted of:
1. C123 Construction Company Limited holds 67.77 percent of shares (1 6,550 shares)
2. Pace Interior Services Company Limited holds 12.23 percent of shares (183,450 shares)
3. Mr. Thanasit Khunpluem holds 10 percent of shares (150,000 shares)
4. Mr. Yuthachai Phukhanthasom holds 5 percent of shares (75,000 shares)
5. Marinethai Holding Company Limited holds 3 percent of shares (45,000 shares
6. Mr. Chaiyakon Watprakairat holds 2 percent of shares (30,000 shares)
The financial statements for the fiscal year ending June 30, 2023, audited by the auditor, are summarized as follows:
| Section | B.E. 2566 | B.E. 2565
(Unit: Baht) |
| Total assets | 148,497,548.39 | 299,887,888.29 |
| Total liabilities | 50,400.00 | 20,759.00 |
| Shareholders’ equity | 148,447,147,89 | 299,867, 129.29 |
| Total revenue | 217.46 | 3,414.04 |
| Total expenses | 1 ,420, 198.86 | 136,284.75 |
| Unappropriated retained earnings | (1,552,852.11) | (132,870.71) |
| Net profit for the period | (1,419,981.40) | (132,870.71) |
After the acquisition of shares by STECP from various sellers totaling 51 percent, the list of shareholders in Mars Water Supply Company Limited will consist of:
1. Stecon Power Company Limited holds 51 percent of shares (765,000 shares)
2. C 123 Construction Company Limited holds 32 percent of shares (480,000 shares)
3. Mr. Thanasit Khunpluem holds 10 percent of shares (150,000 shares)
4. Mr. Yuthachai Phukanthasom holds 5 percent of shares (75,000 shares)
5. Mr. Chaiyakon Watprakairat holds 2 percent of shares (30,000 shares)
- Total value of consideration
The investment value of the Company’s 51 % stake in Mars Water Supply Company Limited is worth a total of 317,063,957.35 baht.
- Criteria used to determine the value of consideration
The Company assessed the value of the business using the discounted cash flow method in Mars Water Supply Company Limited as the criteria for determining the share purchase price and found that the share value was 424.837 baht per share.
The Company therefore acquired 536,550 shares of Mars Water Supply Company Limited from Cl 23 Construction Company Limited, at a price of 227,946,292.35 baht (average price of 424.837 baht per share), and 45,000 shares from Marinethai Holding Company Limited at a price of 19, 1 17,665 baht (average price of 424.837 baht per share).
As for Pace Interior Services Company Limited, the Company negotiated the price and acquired 183,450 shares at a price of 70,000,000 baht (average price of 381.575 baht per share).
In total, 765,000 shares of Mars Water Supply Company Limited were acquired at a price of 317,063,957.35 baht (average price of 414.462 baht per share), which was lower than the company’s estimated price (325,000,000 baht for 765,000 shares).
- Benefits that are expected to receive
Investing in Mars Water Supply Company Limited (MARS) has many benefits as follows:
1 . To generate recurring and non-volatile income for the Group.
Investment in businesses and utilities is the main basis for increasing recurring income, which is in line with the Company’s strategy to increase the proportion of recurring income. In addition, the utility business is a business with non-volatile income due to the long-term contract period, the minimum volume of water sales specified in the contract, and the clear water buyers. Therefore, income from investment in the utility business is a stable and secure income, which allows the Company to clearly estimate future cash flow.
2. To expand the business of producing tap water for sale to government agencies and private sectors in other projects in the future.
Since Mars Water Supply Company Limited has expertise in tap water and in many areas and communities in Thailand still require more water, STECP can also expand its tap water production services for sale to government agencies and private sectors in areas that are still lacking and/or especially in communities that still have problems accessing clean water sources.
3. To be a pilot project to accumulate a portfolio for STECP for fundraising in the stock market in the energy and utilities business.
One of the Company’s plans is to list its energy and utilities business portfolio on the stock market. Therefore, the investment in MARS will be a pilot project to accumulate STECP’s portfolio as a subsidiary of the Company, which has the main objective of investing in the energy and utilities business for fundraising in the stock market (IPO) to expand STECP’ s future investment.
4. It is an investment in a business that helps increase efficiency in accessing tap water.
Currently, the water production station of the Metropolitan Waterworks Authority is not sufficient to meet the demand from the increasing water demand from the expansion of the business sector, which causes people to have insufficient water to use. In order to respond to the water usage needs of the community and reduce the rate of water loss from the Metropolitan Waterworks Authority, we see the potential to develop the project to sell the water to industrial and the general public and also increase the potential for water production and to increase the efficiency and management of water usage in all sectors and ensure that there will be sustainable water usage and supply.
- Conditions that may affect the right of shareholders
None
- Sources of Fund
The company will use funding sources from various channels such as working capital, Cash from the company’s turnover that will be received from a normal business operation, loan from financial institutions, etc. The company will consider the sources of funds to be used as appropriate.
- Interests or Connected Transaction between the Listed Companies
The company does not have any direct or indirect Interests or Connected Transaction between directors, management, and shareholders amounting to 10 Percent or More.
- The opinion of the Board of Directors
The Board of Directors’ Meeting No. 6/2024 on July 25, 2024, resolved to approve STECP to acquire shares of Mars Water Supply Company Limited in the proportion of 51% to 58% of its total shares for a value not exceeding 370 million baht. At the time of this announcement, STECP acquired shares of Mars Water Supply Company Limited in the proportion of 51% for 317,063,957.35 baht. And approve the authorized directors of STECP to take all relevant actions to complete the said transaction in all respects. The said transaction is appropriate and beneficial to the Company and its shareholders as it will support STECP, a subsidiary of the Company, to receive dividend income from Mars Water Supply Company Limited in the future.
- The opinions of the audit committee and/or directors of the company that are different from the opinions of the board of directors
None
