Udon Plaza Co, the operator of UD Town in Udon Thani, will have Nippon Pack (Thailand) Plc as its new shareholder to help expand its retail and tourism business to respond to the Asean Economic Community (AEC).
Nippon Pack, the SET-listed plastic packaging producer, will hold about a 20.52% stake in Udon Plaza or 800,000 shares at a cost of 80 million baht.
Udon Plaza will raise its registered capital from 300 million to 380 million baht. The transaction will be completed in July or early August.
Tanakorn Weerachatyanukul, president and chief executive of Udon Plaza, said the deal will help the company have fresh capital to support its investment, including a hotel and convention centre.
"I believe Udon Thani has a lot of business potential due to strong economic and tourism growth in the past few years and the coming of the AEC by the end of 2015," he said.
For UD Town, having a new shareholder is a good option to reduce the company's cost of funds and will help develop UD Town with related activities.
Mr Tanakorn said the company will use the 80 million baht from Nippon Pack as part of its budget to develop a hotel in the same area of UD Town and extend the space of its convention centre from 1,500 to 4,000 square metres.
The projects require a combined investment of 150 million baht.
Development of the budget hotel with 100-120 rooms is expected to start next year, with its launch due in 2015.
Gen Vichit Yathip, chairman of Nippon Pack, said the company saw the potential of Udon Thani province as an economic centre in the Northeast.
The partnership will boost Udon Plaza to become the largest shopping mall in the Northeast.
"We believe in the potential of Udon Thani and UD Town, which has been very prominent in the past 2-3 years. Business talks were conducted with a strong shared vision to help both of us grow together," Gen Vichit said.
NIPPON shares closed yesterday on the Stock Exchange of Thailand at 2.20 baht, down 6 satang, in trade worth 12.18 million baht.
About the author
- Writer: Pitsinee Jitpleecheep
Position: Business Reporter