Published on 20 March 2009
GM Thailand signs B13.5bn loan deal BBL, SCB, Tisco to finance three projects General Motors Thailand signed agreements on Friday for 13.5 billion baht worth of seven-year loans with three local banks to help finance three new plants in Rayong.
Celebrating the signing of the agreement, from left: Bangkok Bank president Chartsiri Sophonpanich; Steve Carlisle, president of GMTH/ Asean and Chevrolet Sales Thailand; SCB president Kannikar Chalitaporn; Suthas Ruangmanamongkol, president of Tisco Bank. APICHIT JINAKUL Bangkok Bank and Siam Commercial Bank will provide loans of 6 billion baht each to the US auto giant, with another 1.5 billion arranged by Tisco Bank. General Motors Thailand (GMTH) will use the funds to finance three projects: a plant for its next-generation pickup trucks, a plant to assemble pickup-derived sport utility vehicles (SUVs) and a new diesel engine manufacturing plant. The investments will be carried out from 2011 to 2012, with the three facilities to be located at the company's 440-rai complex in Rayong. US parent General Motors will provide $118 million in equity funding to help finance the projects, which have a total cost of 15 billion baht. Some of the money from the parent will also be used for working capital. Steve Carlisle, the president of GMTH/Asean and Chevrolet Sales Thailand, said the proceeds would facilitate further growth of the GM and Chevrolet brands in Thailand and Asean. The company aims to raise its total market share in car sales in Thailand to 3-4% by the end of 2010 from about 2.9% last year. Total car sales in 2009 were 530,000 units.
Published on 20 March 2009
GM had been seeking the loans since last year, but local banks baulked at offering new financing because of the global financial crisis. GM filed for bankruptcy protection last June after car sales plummeted in the US due to the crisis. Chartsiri Sophonpanich, the president of Bangkok Bank, said the GM debt restructuring plan and strong support from the US government helped reassure the bank of the carmaker's financial status. He said the new investment by GM in Thailand would also help convince foreign investors in the potential of the Thai economy and auto industry. GM, under its new shareholding structure, is now 60% held by the US government. The government eventually will look to float GM's shares in the market through a public offering.