SEC encourages HYDRO shareholders to actively vote against a private placement considered unsuitable

SEC advises HYDRO shareholders to carefully review information and exercise their voting rights regarding the proposed private placement of shares, which an independent financial advisor suggests rejecting due to low offer price.

The Securities and Exchange Commission (SEC) advises shareholders of Hydrotek Public Company Limited (HYDRO) to thoroughly review all pertinent information and actively participate in the upcoming annual general shareholders’ meeting on 29 April 2025.

The meeting will address the company’s proposal for a private placement of ordinary shares to two specific investors. The independent financial advisor (IFA) recommends that shareholders reject this proposal, as the offer price is below the fair value determined by the IFA.

On April 29, 2025, HYDRO will seek shareholder approval to issue and sell 187,500,000 ordinary shares at 0.80 baht per share, totaling 150 million baht. These shares will be offered to two individuals: Miss Atchareeporn Chaemratsamee, who will receive 118,750,000 shares, and Miss Preeyasuda Akkarasrisawad, who will receive 68,750,000 shares.

The funds from this private placement will support the expansion of the company’s construction and infrastructure contracting business across three projects: an apartment building in Chiang Mai Province, a commercial building in Lamphun Province, and an infrastructure and public utility development in an industrial estate in Lamphun Province. Additionally, the funds will be used as working capital for business operations.

The Board of Directors and the Audit Committee of HYDRO believe that the PP transaction will enhance the company’s strong financial standing, provide cash flows for large-scale projects, and create a balanced capital structure. Additionally, the Board notes that the market price of HYDRO shares is highly volatile with limited trading liquidity, which may not accurately reflect the company’s fundamental value. After evaluating the adequacy of funding and the current economic and capital market conditions, the Board considers the PP offer price of 0.80 baht per share to be fair and appropriate, offering a compelling incentive for PP investors.

In this regard, the IFA views that the PP offering to fund new construction projects, which are still in the contract drafting and negotiation stages, introduces uncertainty. Therefore, they cannot comment on the appropriateness and reasonableness of the transaction. However, considering HYDRO’s current liquidity status and needs, the IFA deems the PP transaction reasonable as it will provide a source of funding to enhance liquidity, allowing HYDRO to continue operations and improve long-term cash flow. This is contingent on the company executing new projects with careful planning and efficient cost management. Nonetheless, the proposed PP share price of 0.80 baht per share is deemed inappropriate as it is below the fair value range of 1.07 – 1.30 baht per share, as assessed by the IFA. Therefore, the IFA advises shareholders not to approve HYDRO’s PP transaction at this time.

The issuance of ordinary shares via PP is regarded as an offering of new shares at a price below market value. Approval from the shareholders’ meeting is required, with at least three-fourths of attending and eligible shareholders voting in favor. Furthermore, there must be no opposition from shareholders representing 10 percent or more of the total votes of those attending and eligible to vote.

The SEC advises HYDRO shareholders to thoroughly review the information and actively safeguard their interests. Shareholders are also encouraged to seek further details from the Board of Directors and HYDRO management to ensure they have all necessary information for making informed voting decisions at the shareholders’ meeting.

Source : SEC urges HYDRO shareholders to exercise their voting rights on a private placement deemed inappropriate by the independent financial advisor