Shares of Delta Electronics (Thailand) Public Company Limited, or DELTA, fell sharply after the market digested news that DELTA ELECTRONICS INT'L (SINGAPORE) PTE. LTD., the largest shareholder with a 42.85% stake in DELTA and a subsidiary of Taiwan's Delta Electronics Inc., plans to issue and offer dual-tranche zero coupon overseas exchangeable bonds worth a total of 1.5 billion US dollars on September 21, 2026. The issue is split into 500 million US dollars of Tranche A Bonds, maturing on September 21, 2027, and 1 billion US dollars of Tranche B Bonds, maturing on September 21, 2031. The bonds are exchangeable into DELTA shares, with an initial conversion price of 266.80 baht per share for the Tranche A Bonds, a 15% premium to the reference price, and 301.60 baht per share for the Tranche B Bonds, a 30% premium to the reference price. Holders of the Tranche B Bonds also have the right to require redemption in whole or in part at 99.25% and 98.51% of principal upon the completion of 1.5 years and 3 years from the bond issue date. As a result of the news, on September 15, 2026, DELTA shares tumbled 7.54%, or 19.00 baht, to close at 233.00 baht, with trading value of more than 15.2562 billion baht. That means over the two days in which the news was absorbed, DELTA shares have fallen nearly 12%, or 31 baht, and also dragged the Thai stock market lower, since every 1 baht move in DELTA's share price affects the SET index by 1 point. Earlier, in early 2025, the Delta group had issued and offered 525 million US dollars of zero coupon exchangeable bonds through Delta International Holding Limited B.V., a company in the major shareholder group and a subsidiary of Taiwan's Delta Electronics Inc., with an initial conversion price of 187.6 baht per share, prompting investors to sell DELTA shares for several consecutive days before they later recovered. Analysts view this new convertible bond issue as a short-term negative for the share price but not a hit to fundamentals, because conversion is not immediate and it will remain an overhang. The interesting point is that this bond issue carries a premium and does not involve issuing new shares to support conversion, but instead uses existing shares held by the major shareholder, so there is no dilution because no new shares enter the market, and it also helps improve liquidity in DELTA shares. From another angle, however, it is seen as the parent company needing cash and therefore wanting to sell shares, which the market views as more negative than positive.
Delta Electronics (Thailand) Public Company LimitedMajor shareholder's $1.5B exchangeable bond issue over DELTA shares raises dilution/overhang concerns, sending shares down 7.54%.
