SIRI and XPG are offering Thailand’s first SEC regulated real estate-backed investment token, SiriHub Token, through their subsidiaries that will allow investors to gain stable yields up to 8%, making this an alternative investment in the digital era.
Digital token, coin or crypto token are words used to call a digital representation of value or rights that is issued and sold by the issuer for a certain purpose. To simply put it, digital token is an alternate version of stocks that are traded in the stock exchange, regulated by the Securities and Exchange Commission (SEC).
Regulated by SEC, SPV 77 Company Limited, a subsidiary of Sansiri Public Company Limited (SIRI), will issue 240 million tokens at a price of THB10 per token through an ICO portal XSpring Digital Company Limited, a subsidiary of Xspring Capital Public Company Limited (XPG), with the objective of raising funds of 2,400,000,000 baht, in order to invest in obtaining revenue from Siri Campus Office building owned by Siripat Four Company Limited and will also invest in 100% shares in Siripat Four by putting the asset into the Trust Fund in order to protect the interests of token holders.
The strong point of SiruHub Token is that everything from start to finish is legally licensed and will be under the supervision of Thailand’s SEC along with its “real” assets to ensure its value.
The investment in SiriHub Token is divided into two tranches; SA and SB. With 4-year token life, SiriHub offers 1,600 million baht of offering size in SA and 800 million baht in SB. The main difference between these two trenches is their revenue sharing, which is not exceeding 4.5% per year for SA and 8% at max for SB, paying quarterly.
When making an investment, there is no doubt that investors will look for higher return, SB in this case. Just like any other investments, there are pros and cons in both trenches. The SB may offer an attractive return of 8%, but it may not suit every investor.
To compensate lower returns token holders, SA will get the chance to taste the fruit of investment before SB. A maximum of 1,600 million baht of net asset sale proceeds will be bestowed to SA token holders, while the amount over 1,600 million baht of aforementioned sale proceeds is what’s left for those who gain 8% throughout the holding period.
Moreover, on top of the first compensation for SA, these token holders will be allowed to vote for asset sale if net sale proceeds are less than 1,600 million baht, while SB has no rights on the voting. SA may choose to sell the asset if the value is less than 1,600 million baht and leave SB with nothing.
According to the Department of Business Development, Siripat Four Company Limited has a registered capital of 277,500,000 baht, while recording a revenue of 188 million baht in 2020 with a net loss of 39 million baht. As for 2019, the company recorded a revenue of 6.3 million baht with a net loss of 6.2 million baht.
On December 17, 2019, SIRI, through its subsidiary, sold Siripat Four Company Limited to Office 77 Co., Ltd. and Mr. Vichai Sawatyanon at a total value of 696,763,100 baht.
Simply put, the investment in SiriHub Token is just like any other investment where investment in lower return may gives more assurance than the one with higher returns (high-risk reward).
It is up to interested holders to choose slow but (kind of) sure investment in SA or taking a quick gain in 4 years with a return nearly double of what SA gets.
The partnership between SIRI and XPG has been giving positive returns to both companies in terms of share prices. SIRI announced the acquisition in XPG on May 14, 2021. Since then the share price of SIRI rose from THB0.98 to THB1.28 at the closing of September 21, 2021, representing an increase of 30%. Meanwhile, the share price of XPG rose from THB1.69 to THB3.72, representing a gain of 120%.