UPDATE 1-Thai mall developer Central Pattana to invest up to $468 mln in ASEAN push
* Plans to spend up to 15 bln baht in Southeast Asia
* To open first foreign mall in Malaysia in 2016
* Aims to open shopping malls in Indonesia, Vietnam (Recast with loan and investment plans)
By Khettiya Jittapong and Manunphattr Dhanananphorn
BANGKOK, Sept 3 (Reuters) - Thailand's largest shopping mall developer, Central Pattana Pcl (CPN), said it plans to spend up to 15 billion baht ($468 million) on its push outside its national borders as it targets high growth in spending among Southeast Asian consumers.
CPN will use the funds to open two to three new malls in the region over the next five years including its first overseas shopping centre in Malaysia in 2016, a senior executive said, adding that it would use loans, cash, and the proceeds from the sale of a property fund.
The plans come as other Thai companies, such as sukiyaki restaurant chain MK Restaurant Group and Thai fashion designer Jaspal, have said they plan to expand in the region. Central Retail Corp, owned by CPN's parent, the unlisted retail conglomerate Central Group, plans to open its first Central Department Store in Jakarta in 2014.
"We will spend around 4-6 billion baht per store in ASEAN where we see growth opportunities as it will become a single market," Wallaya Chirathivat, CPN's senior executive vice president for business development, told a news conference.
She added that the company plans to open new malls in Indonesia and Vietnam in the next five years, and will eventually open 10 more locations in Malaysia.
CPN is majority owned by the Chirathivat family, Thailand's second-richest family according to a ranking last year by Forbes Magazine. The company competes with unlisted Mall Group, which owns Siam Paragon and Emporium shopping malls in Bangkok and others elsewhere in Thailand.
As Thai companies ramp up their expansion plans, some are increasingly relying on debt.
Charoen Pokphand Foods, which bought Hong Kong-listed C.P. Pokphand Ltd for $2.1 billion, saw its debt to EBITDA - a gearing ratio - rise to 24.59 times in the first half of 2013, versus 7.85 in 2012 and 3.34 in 2011.
Chaiyatorn Sricharoen, an analyst at Bualuang Securities, said he was not concerned about CPN's debt level given its strong cash position, while the current Thai consumption slowdown has not severely affected its operations because spending in shopping centres remains strong.
"Debt should remain at a comfortable level. Even factoring in capex for all undisclosed projects, net gearing would peak at only 0.6 times, far below CPN's policy cap of 1.0 times," Sricharoen said.
CPN's net gearing dropped to 52 percent from about 80 percent in the first quarter after a recent $367 million share offering and debt repayment.
At the end of June, CPN's debt-to-equity ratio was at 0.66 times, the lowest ever, according to Thomson Reuters' Eikon.
CPN shares, valued at $5.4 billion, have fallen 28 percent in the past three months, underperforming a 15 percent drop of the main index, due to concerns about weak consumer spending and that poor market conditions could force the company to postpone its plan to sell a property fund.
Market participants have anticipated CPN could raise about 10 billion baht from selling its Central Plaza Chiangmai shopping mall into the fund.
In Thailand, CPN aims to open three to five shopping malls a year with an average investment of 12 to 15 billion baht a year, mostly in major cities in the provinces, with a target of 35 malls by 2016 from 23 at the end of 2013. ($1 = 32.0700 Thai baht) (Additional reporting by Patturaja Murugaboopathy in BANGALORE; Editing by Chris Gallagher)