* 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 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,"
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)