STOCKS NEWS THAILAND-Italian Thai up; rules out need for capital increase

Mon Oct 29, 2012 12:30am EDT

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Shares in builder Italian-Thai Development Pcl rose as much as 1.5 percent, outpacing construction shares and the broader market, after the management told analysts it had no plans to raise capital to fund the Dawei project in Myanmar.

Italian Thai shares were up 0.5 percent at 4 baht, climbing at one point to 4.06 baht, the highest since Feb. 22. Its smaller peers Ch Karnchang and Sino-Thai Engineering and Construction each lost almost 1 percent.

The benchmark SET index was down 0.3 percent.

"Management stated that ITD does not plan to increase its capital any time soon despite its debt-equity ratio of 3:1 and signifcant capex requirements to build the project in Myanmar," the broker said in a report dated Oct. 26

To raise funds for the project, it plans to start selling land in the Dawei industrial estate in 2013, selling a stake in its huge potash mine in Thailand, getting the Thai government to invest up to 75 percent of the infrastructure projects and borrowing from JBIC and Thai banks, the broker said.

Italian Thai shares have risen 11 percent so far in 2012, underperforming a 70 percent gain in Sino Thai and a 25 percent rise in the SET index, amid concerns over its stretched balance sheet and potential capital increase.

1121 (0421 GMT)

(Reporting by Viparat Jantraprap in Bangkok; Editing by Sunil Nair; viparat.jantraprapaweth@thomsonreuters.com)

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