May 13, 2016 Underwriting of Convertible Bond issued by Group Lease PCL

May 13, 2016

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




Underwriting of Convertible Bond issued by Group Lease PCL

With regard to the underwriting of convertible bonds agreed between JTRUST ASIA PTE. LTD. and Group Lease PCL, J Trust Co., Ltd., the parent of JTRUST ASIA PTE. LTD., published a press release. Please refer to the attachment.

May 13, 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, Executive Officer, General Manager of General Accounting Department
Telephone: +81(3) 4330-9100




Underwriting 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 underwriting a convertible bond of Group Lease PCL (the Kingdom of Thailand; Chairman & CEO, Mitsuji Konoshita; listed on the Stock Exchange of Thailand; ticker code: GL; hereinafter “GL”) (hereinafter, “Underwriting”) as described below.

The Underwriting is subject to approvals by: (i) GL’s Board of Directors’ meeting; (ii) the Stock Exchange of Thailand on issuing the convertible bond; and (ii) GL’s shareholders’ meeting regarding a resolution on issuing the same bond.

1.Purpose

The J Trust Group established JTA on October 7, 2013 with a view to overseas expansion, especially in the fast-growing South 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, we use our network and expertise to proactively support business expansion of GL, which has been aggressively developing hire-purchase financing in the Kingdom of Thailand. To this end, with regard to GL’s convertible bond underwritten on May 22, 2015, we exercised the conversion right and acquired 6.43% of GL’s outstanding common shares on December 30, 2015. This generated operating revenue worth 2.6 billion yen in the investment business thanks to the current market value far above the exercise price.

GL provides hire-purchase financing primarily for motorcycles and agricultural instruments, based on its own business model called Digital Finance Platform, in the Kingdom of Thailand, Kingdom of Cambodia and Lao People's Democratic Republic. GL’s Digital Finance Platform is a very unique and financially innovative model, featuring IT technology adopted throughout sales bases called Point of Sales (POS). It enables GL to leave competitive finance companies far behind in terms of profitability, business growth rate and overseas expansion. Going forward, GL plans to provide hire-purchase financing in Southeast Asian countries including Vietnam and Myanmar. We seek closer tie-ups in hire-purchase financing in the Republic of Indonesia, where GL has already launched business. In fact, we established a multi-finance joint company with GL from a strategic point of view, expecting Digital Finance Platform to drive the growth of lease business and consumer finance business in Indonesian and ASEAN markets. We also consider providing hire-purchasing financing targeting Indonesian consumers with high growth potential. In summary, we believe that closer collaboration with GL through the Underwriting will be mutually beneficial. We will increasingly invests in hire-purchase financing to benefit from growing population and economy in ASEAN and other countries and will pursue operational synergies with GL through financial support.

2.Overview

(1) GL

GL is a finance company founded in 1986 and operates mainly motorcycle hire-purchase financing business in the Kingdom of Thailand. GL maintains high level of profitability in motorcycle hire-purchase financing business in the Kingdom of Thailand where competition is increasingly fierce. In recent years, GL has expanded business by developing sales channels to northeast areas of Thailand and prefectures close to Bangkok. Furthermore, GL acquired Thanaban Co., Ltd., the 5th largest player of the industry, in 2014, to increase its shares steadily. As a result, GL ranks 1st in terms of newly obtained contracts in 2014 in Thailand, according to GL’s latest statistics.

In the meantime, GL created Digital Finance Platform as an innovative business model and, under a new corporate vision of “To become a leading ASEAN Regional Finance Company” announced in 2012, is promoting to enter other markets in Southeast Asia. In the same year, GL obtained exclusive distribution rights for Honda motorcycles in the Kingdom of Cambodia, in which GL has been rapidly expanding hire-purchase financing for Honda motorcycles with an over 95% market share. Moreover, GL formed a strategic alliance with a local supplier of Kubota, a leading agricultural equipment manufacturer, to provide finance lease in Cambodia in the latter half of 2013 and now enjoys a steady increase in the number of contracts. Also, GL has extensive lineups of hire-purchase financing products to meet local needs, such as launch of solar-panel leasing to regions suffering a shortage of electricity.

GL achieved record-high profits in FY2015, with its operational base and earnings expanding rapidly in Cambodia and Laos. It expects further growth in earnings and demand for financing.

(2) Hire-purchase financing business in Southeast Asia and operational synergies with the Group

We believe GL’s hire-purchase financing will grow further mainly due to the following reasons: (i) high economic growth is likely in Southeast Asia; (ii) middle-income earners who use hire-purchase financing to purchase motorcycles are expect to increase; and (iii) GL’s exclusive Digital Finance Platform will be made available to the Group in light of the possibility of starting leasing business covering agricultural equipment.

We also consider reinforcing business alliance with GL will be mutually beneficial because it helps us expand banking business of PT Bank JTrust Indonesia Tbk., our subsidiary in Indonesia, such as financing through the use of Digital Finance Platform, while assisting GL’s leasing business and other finance-related businesses in ASEAN.

We will strive to further expand our business in ASEAN, where high levels of economic expansion and population growth are likely, by using the Group’s competence in financing business and network and by adopting hire-purchase financing expertise of GL, which has already conducted business in the region aggressively.

(3) Overview of convertible bond

i.
Issue price: USD 130,000,000 (14.3 billion yen, 1 USD = 110 yen)
ii.
Interest rate: 5% (planned)
iii.
Maturity: 3 years (planned)
iv.
Conversion price: 35 Baht per share (109.55 yen, 1 Baht = 3.13 yen) (planned)
v.
Number of shares after full conversion: 228,842,857 shares (planned)
vi.
Shareholding ratio after full conversion: 13.82% (planned)

The above conditions are proposed by us and yet to be confirmed.

3.Overview of GL

1. Trade name Group Lease PCL
2. Headquarter Kingdom of Thailand
3. Representative Mitsuji Konoshita
4. Business Hire-purchase financing business of motorcycle and agricultural equipment
5. Capital 1,539.17 million Baht (as of end December 2015)
(approximately 4.81 billion yen, 1 Baht = 3.13 yen)
6. Date of Establishment May 6, 1986
7. Principal shareholder and shareholdings(as of end December 2015) Engine Holdings Asia Pte.Ltd. 28.2%
A.P.F. Holdings Co.,Ltd. 11.1%
Thai NVDR Co.,Ltd. 13.9%
SIX SIS LTD. 13.0%
Mr. Suthipong Vesparut 3.8%
8. Relationship with J Trust Capital relationship Since J Trust Asia exercised the right to convert GL's convertible bond into shares dated Dec. 2015, J Trust Asia holds 6.43% of GL’s common shares.
Personal relationship None
Trading relationship None
Relevant circumstances for related parties None
9. Operating performance and financial position for the past 3 years*    (unit: million yen )
December 2013 December 2014 December 2015
Net Asset 7,077 7,867 23,729
Total asset 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. Headquarter 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 March 31, 2016)
6. Date of Establishment October 7, 2013
7. Principal shareholder and shareholdings J Trust Co., Ltd. 100.00%

5.Schedule

Resolution by GL’s Board of Directors meeting regarding the conclusion of underwriting agreement May 17, 2016 (planned)
Conclusion of underwriting agreement May 31, 2016 (planned)

6.Future outlook

The impact on the current fiscal year’s consolidated operating results is insignificant.

-End-

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