Bank of Ayudhya (BAY) has entered a share purchase agreement to acquire a 50% stake in SB Finance Company Inc (SBF) for an estimated 1.83 billion Philippine pesos (1.08 billion baht), marking its first foray into the Philippines.
The estimated investment value is based on SBF's equity book value of 904.3 million baht at the end of June, the bank said on Thursday in a filing to the Stock Exchange of Thailand (SET). The purchase value is subject to change in actual book value on the closing date.
The country's fifth largest lender by assets will purchase 7.08 million shares in SBF from Security Bank Corporation (SBC), it said.
After the transaction, SBC's shareholding in SBF will fall to 49.5%, but it plans to buy a 0.46% stake from minor shareholders later.
SBF is engaged in financing and leasing for consumers in mass market segments. It is the Philippines' fifth largest consumer finance firm by total assets and the fourth biggest by gross loans with portfolio worth 3.51 billion Philippine pesos.
The Philippine firm's operating income amounted to 495 million Philippine pesos for the January-to-June half, with net profit of 164 million Philippine pesos.
BAY's expansion is in line with parent Bank of Tokyo Mitsubishi UFJ's (MUFG) policy to deepen the group's reach in Southeast Asia as Japanese clients move their manufacturing base to the region.
The bank has a footing in Cambodia, Laos and Myanmar through overseas branches and consumer finance networks. In January 2017, BAY acquired the entirety of Hattha Kaksekar, Cambodia's fourth largest microfinance lender.
