‘Mankong Kheha Kan Public Company Limited’ or “MK” has announced a business restructuring plan to expand its portfolio in 'Warehousing' and 'Factory Leasing' as its flagship operations to capitalize on the global industrial sector's expansion into ASEAN, supporting stable and sustainable growth. The company is preparing to seek approval from an extraordinary shareholder meeting on March 1, where it will sell 100% of its shares in RX Wellness Co., Ltd. or “RXW”, a health service provider, to FNS Holdings Public Company Limited (or “FNS”), its parent company. This includes a 10-year land lease agreement and the purchase of common shares in BFTZWN Co., Ltd. or “BFTZWN”, a subsidiary, increasing its ownership stake to 100%, and acquiring additional units in the Prospect Logistics and Industrial Real Estate Investment Trust or “PROSPECT REIT” to 30.80%, positively impacting the company's performance.

Mr. Warasith Pokachai Phat, CEO of Mankong Kheha Kan Public Company Limited (MK) stated that the company operates in three main business segments: (1) real estate development for sale under the “Chuan Chuen” brand, (2) warehousing and factory leasing through Prospect Development Co., Ltd., holding a 50% stake in BFTZWN, and investing 8.61% in the Prospect REIT, and (3) health service and accommodation under RX Wellness Co., Ltd. (RXW), with two health service locations: the Rakxa Wellness project in Bang Kachao covering approximately 108 rai and the RXV Wellness Village project covering about 10 rai.

Recently, on December 27, 2023, the company's board resolved to propose to the extraordinary shareholder meeting on March 1, 2024, at 2:00 PM at the Crown Ballroom, 21st floor, Crowne Plaza Bangkok Lumpini Park, to seek approval for the restructuring of the company's operations by selling 13,799,998 common shares of RXW, with a par value of 100 baht per share, representing 100% of the issued shares, to FNS, the major shareholder, for approximately 276 million baht. Additionally, the company will sell real estate assets related to health service operations valued at approximately 84 million baht, totaling around 360 million baht, along with a 10-year lease agreement for land and buildings for health service operations, with a total lease value of approximately 1.77 billion baht.

Furthermore, FNS will need to provide loans to RXW to repay debts and interest to the company.

At the same time, the company will seek approval to purchase common shares and trust units from FNS, which includes 1) 24,999 common shares of BFTZWN with a par value of 100 baht per share at a price of 2,000.08 baht per share, totaling 50 million baht, representing a 50% stake of the issued shares.

2) 83,212,061 units of PROSPECT REIT with a par value of 9.4697 baht per unit at a price of 9.3885 baht per unit, totaling 781 million baht, representing 22.19% of the issued trust units.

After the restructuring, the company will increase its stake in BFTZWN through Prospect Development Co., Ltd. from 50% to 100%, gaining complete decision-making power and management rights, as well as increasing its stake in PROSPECT REIT from 8.61% to 30.80% of the issued trust units, enhancing decision-making authority and operational efficiency. This will also provide benefits from the increased stake in the trust units and improve liquidity for the company, as PROSPECT REIT has good trading liquidity.

The restructuring aims to align with the company's future business plan, focusing on growth from specialized warehousing and factory leasing as core businesses. BFTZWN and PROSPECT REIT are companies and trusts related to warehousing and factory leasing, which have good growth rates and will contribute to stable future performance. Meanwhile, the health service business is still in its early operational phase and has been affected by the COVID-19 pandemic. Selling shares will reduce the burden of financing for operations and investment expansion. However, to ensure the company's business base and revenue are stable and grow in the long term, this restructuring opens opportunities for continuous expansion in warehousing and factory leasing, which may impact additional debt obligations. The company will hold a bondholder meeting to amend the financial ratio requirements (Debt/Equity Ratio).

“The warehousing and factory leasing business is expected to continue expanding in line with the global and Thai economic recovery, supporting the growth of international trade. Additionally, the recovery of the tourism sector will stimulate consumer demand, positively impacting manufacturing recovery. Domestic investment is also supported by developments in industrial estates, particularly in the Eastern Economic Corridor (EEC), and the readiness of Thailand's key manufacturing supply chains, such as the automotive and textile industries. Furthermore, the demand for foreign investors to relocate production bases to avoid geopolitical risks, such as the expansion of EV production from China to Thailand and the relocation of electronics and technology industries to Thailand, are all positive factors for the warehousing and factory leasing business to meet the growing demand in the future,” Mr. Warasith stated.