"We consider our alliance with GL to be beneficial to both parties because we will grow our banking business as we support GL to grow its leasing and other finance-related businesses in the ASEAN markets as well," J Trust said in an official statement issued in Tokyo earlier this week (Dec 28, 2015).
The statement came after J Trust Co Ltd (TSE:8508), through its wholly-owned Singapore subsidiary J TRUST ASIA PTE LTD, decided to exercise its right to convert US$30 million worth of GL's convertible debentures into 98.1 million GL shares, which will amount to about 6.43% of GL's expanded capital base. J TRUST ASIA subscribed to the debentures in May this year.
"Through the conversion of stock, we are supporting the growth of leasing and other consumer-finance business in Indonesia and other ASEAN markets together with GL as our strategic partner. And we can also expand our banking business," the J Trust statement said.
GL Chairman and Chief Executive Officer Mitsuji Konoshita said although J Trust's conversion may lead to a shareholding dilution, earnings per share will not be diluted and the net result will be very positive for GL. "Through our collaboration with J Trust, our new business in Indonesia will generate more profits and our earnings per share (on the new capital base) will further increase," he said.
GL is in the process of registering a new joint venture company in Indonesia with J Trust and another local Indonesian entity as joint-venture partners to kick-start leasing and other consumer-finance businesses in Indonesia. Funding for the new venture will come from a local Indonesian bank, PT Bank JTrust Indonesia, which is a J Trust subsidiary. The new Indonesian business is expected to kick off early next year.
GL's latest expansion into Indonesia is coming after the company's successful expansion into Cambodia and Laos. Profitability from the Cambodian operations in particular has been remarkable and has now surpassed that from operations in Thailand. Of the TBH150.27 million record-high profits in Q3 this year, roughly TBH70 million was from Thai operations while the remaining TBH80 million were contributed from overseas the bulk of which from Cambodia.
Mr. Konoshita has stated that the company is expanding aggressively into the booming markets of CLMV (Cambodia, Laos, Myanmar and Vietnam) plus Indonesia because of their strong growth potentials whereas in Thailand, GL has been focusing more on consolidation and asset-quality improvement due to the economic slowdown.
He is particularly bullish on Indonesia which has a far larger population (250 million) with growing numbers of new consumers with higher purchasing power. "The Indonesian market is ten times larger than Cambodia," he stated.
About Group Lease PCL
Group Lease PCL ("GL") was established on 6th May 1986 and listed on the Stock Exchange of Thailand in 2004 (SET:GL). In 2007, APF group has become major shareholder by holding around 65% of total shares. The company has expertise in hire-purchase of motorcycles as it has been in the motorcycle leasing business for over 20 years. The motorcycle brands for financing include Honda, Yamaha, Suzuki, Kawasaki. In 2012, GL announced a long-term business plan to become the leading finance company in the Southeast Asian region. In order to do so, the Company has acquired Group Lease Holdings Pte., Ltd. (GLH), a Singapore holding company, as a headquarters for its expansion plan in other countries. For more information, please visit www.grouplease.co.th.
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