Oct 31, 2016 Subscription of Convertible Bond issued by Group Lease PCL

October 31, 2016

Company Name: JTRUST ASIA PTE.LTD.
Representative: Nobuyoshi Fujisawa, Managing Director, CEO
Contact: Shigeyoshi Asano, Director
Telephone: +65-6225-6938




Subscription of Convertible Bond issued by Group Lease PCL

With regard to the subscription of the convertible bond issued by Group Lease PCL, J Trust Co., Ltd., the parent of JTRUST ASIA PTE. LTD., published a press release. Please refer to the attachment.

October 31, 2016

Company Name: J Trust Co., Ltd.
(Listed on Second Section of the Tokyo Stock Exchange, code 8508)
Representative: Nobuyoshi Fujisawa, President & CEO
Contact: Taiji Hitachi, Director and Executive Officer
Telephone: +81(3) 4330-9100




Subscription of Convertible Bond issued by Group Lease PCL

J Trust Co., Ltd. hereby announces that its subsidiary JTRUST ASIA PTE. LTD. (hereinafter “JTA”) proposed to sign an agreement on subscribing for the convertible bond of Group Lease PCL (the Kingdom of Thailand; Chairman & CEO: Mitsuji Konoshita; listed on the Stock Exchange of Thailand; code: GL; hereinafter “GL”) (hereinafter, “the Subscription”) as described below.
The Subscription is subject to approvals by: (i) GL’s Board of Directors’ meeting; (ii) the Securities and Exchange Commission of Thailand on issuing the convertible bond; and (ii) GL’s shareholders’ meeting regarding a resolution on issuing the same bond.

1.Purpose

J Trust Group (hereinafter, “JTG”) established JTA on October 7, 2013 with a view to overseas expansion, especially in the fast-growing Southeast Asian region, with its own business model created in Japan as a growth driver in retail finance service, amusement business and real estate business. As part of this initiative, JTG subscribed for the convertible bond of GL, which has achieved successful hire-purchase financing in Thailand, on May 22, 2015 to proactively support their business expansion using our network and expertise. Then, JTG exercised the conversion right and acquired 6.43% of GL’s outstanding common shares on December 30, 2015. Later, JTG further subscribed for their convertible bond worth 130 million U.S. dollars on August 1, 2016 to enhance our relationship with GL.

GL was founded in 1986 as a hire-purchase financing company for motorcycles in Thailand. It currently provides hire-purchase financing services for motorcycles, agricultural equipment and other products in Thailand, Cambodia and Laos using an exclusive business model called Digital Finance Platform, a creative and innovative financial approach featuring IT technology adopted throughout their sales bases called Point of Sales (POS). It enables GL to stand out from competitive finance companies in terms of profitability, business growth rate and overseas expansion. GL has been delivering services in Southeast Asian countries since 2012, under the corporate vision called ASEAN Regional Finance Company, and will expand the hire-purchase financing services to other regional economies including Vietnam and Myanmar. In the latest fiscal 2015, GL achieved record earnings, benefiting from a rapid expansion of sales bases and profit-making operations in Cambodia and Laos. Its earnings are likely to grow further on the back of increasing capital needs. In August 2016, GL formed a partnership with True Money, a mobile payment subsidiary of a Thai company True Corp. The alliance is expected to drive GL’s further growth in Cambodia, a source of huge earnings for the company. Capitalizing on True Money’s distribution network of 5,000 agencies throughout Cambodia will help GL increase revenue substantially. True Money currently has 10,000 agencies in eight provinces of Indonesia (Jakarta, Banten, West Java, Central Java, East Java, East Kalimantan, North Sumatra and North Sulawesi). It will launch business in two other provinces (Bali and South Sumatra) and, if so, the network size will reach 23,000 stores by the end of 2016.

GL signed a partnership agreement with a major listed financing company in Sri Lanka on October 3, 2016 to subscribe for 29.99% shares of the counterparty, expecting business expansion and huge earnings in the region. In addition, GL announced tie-ups with a strong local company in Myanmar on October 13, 2016, including establishment of a joint venture, with an eye to entering the booming financial market there. These activities are potential factors to accelerate the pace of GL’s growth.

GL will issue the convertible bond to finance the business expansion in: (i) Cambodia, where True Money’s network is made available for the financial field; (ii) Myanmar and Sli Lanka, both of which are very promising markets; and (iii) ASEAN regions, where further M&As will be employed.

Meanwhile, JTG and its strategic partner GL established a comprehensive financial company and started its operation in July 2016, aiming to drive the growth of leasing and consumer finance businesses in Indonesian and other ASEAN markets using GL’s Digital Finance Platform. The joint project finances from PT Bank J Trust Indonesia Tbk., our Indonesian subsidiary. The financing scheme is expected to bring great earnings to JTG, and also provide opportunities to form similar partnerships in other ASEAN regions for further growth of JTG. Since strengthening of the relationship with GL is beneficial mutually, JTG has determined to execute the Subscription.

2. Overview of convertible bond

i. Issue price: USD 50,000,000
(About 5.2 billion yen, 1 USD = 104.53 yen)
ii. Issue value: USD 50,000,000
(About 5.2 billion yen, 1 USD = 104.53 yen)
iii. Interest rate: 5.0% (plan)
iv. Maturity: 3 years (plan)
v. Conversion price: 70 Baht per share (plan)
(208.60 yen, 1 Baht = 2.98 yen)
vi. Number of shares after full conversion(plan): 25,000,000 shares
vii. Shareholding ratio after full conversion(plan): 14.3%

Please note that the above conditions are proposed by JTG and yet to be confirmed.

3. Overview of GL

(1) Trade name Group Lease PCL
(2) Headquarters Kingdom of Thailand
(3) Representative Mitsuji Konoshita
(4) Business Hire-purchase financing for motorcycles and agricultural equipment
(5) Capital 1,539.17 million Baht (as of the end of December 2015)
(approximately 4.81 billion yen, 1 Baht = 3.13 yen)
(6) Date of establishment May 6, 1986
(7) Major shareholders and shareholdings (as of the end of December 2015) Engine Holdings Asia Pte. Ltd. 26.39%
A.P.F. Holdings Co., Ltd. 10.42%
Thai NVDR Co., Ltd. 13.01%
SIX SIS LTD. 12.18%
JTA (JTRUST ASIA PTE. LTD.) 6.43%
(8) Relationship with J Trust Capital relationship JTA holds 6.43% of the common shares of GL and 20.00% of those of GL’s subsidiary (PT Group Lease Finance Indonesia; hereinafter “GLFI”).
Personal relationship Our executive concurrently serves as an auditor at GLFI.
Trading relationship None
Relevant circumstances for related parties GLFI falls under a related party.
(9) Operating performance and financial position for the past 3 years* (unit: million yen)
December 2013 December 2014 December 2015
Net assets 7,077 7,867 23,729
Total assets 17,204 22,761 33,694
Operating revenue 4,605 5,829 7,789
Net income 752 368 1,824

*1 Baht = 3.13 yen

4. Overview of JTRUST ASIA PTE. LTD.

(1) Trade name JTRUST ASIA PTE.LTD.
(2) Headquarters Republic of Singapore
(3) Representative Nobuyoshi Fujisawa, Managing Director & CEO
(4) Business Investment business & management support services for investees
(5) Capital 200 million Singapore dollars (approximately 16.3 billion yen)
(as of June 30, 2016)
(6) Date of establishment October 7, 2013
(7) Major shareholder and shareholdings J Trust Co., Ltd. 100.00%

5.Schedule

Resolution by GL’s Board of Directors meeting regarding the conclusion of the subscription agreement: October 31, 2016 (plan)
Conclusion of the subscription agreement: November 2016 (plan)
Resolution by GL’s Extraordinary General Meeting of Shareholders regarding the issuance of the convertible bond: December 2016 (plan)

6.Future outlook

GL’s share price enjoys a steady move, reflecting the successfully growing operations in Thailand, Cambodia, Laos and other countries. GL considers further expansion of business on a global scale, starting from other areas of Asia such as Indonesia. If GL’s share price continues to perform well, JTG could expect an increase in valuation gains on the convertible bond under IFRS, an accounting standard adopted by JTA locally and, upon conversion into shares, could have an influence on our results.
We will give notice immediately, however, if any influence on our results is confirmed.

-End-

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