November 23, 2012 / 5:26 AM / 5 years ago

STOCKS NEWS THAILAND-Sahaviriya Steel hits near 2-month low

Sahaviriya Steel Industries Pcl dropped 1.82 percent to its lowest in nearly two months at 0.54 baht during morning trade after the proceeds from a share offering for raising capital came in below target, a brokerage said.

The company reported a total of 3.28 billion baht ($106.63 million) in raised capital from its share sale to Vanomet Holding AG.

However, broker Trinity Securities said the amount was lower than the target of 13.21 billion baht needed to sufficiently repay the company’s debt.

“At the end of the third-quarter, Sahaviriya carries interest-bearing debt as high as 53,998 million baht compared to the 11,546 million baht in base capital...prompting a higher risk,” Trinity said in a research note.

“We expect Sahaviriya to continue to rally more partners in capital raising, however the global steel situation remained stagnate. Leading steelmakers had lowered their production capacity, thus making it difficult for the company to attract more partners into this capital raising effort”.

The brokerage said it expects Sahaviriya to post a loss of around 3 billion baht in the fourth quarter, and that losses may continue well into the first quarter of next year. It gave the stock a ‘sell’ rating with target price at 0.50 baht.

At 0457 GMT, Sahaviriya shares remained flat at 0.55 baht.

(Reporting by Sinsiri Tiwutanond in Bangkok; Editing by Jijo Jacob;

$1 = 30.72 Baht

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