Thailand: Banpu Power's IPO skyrockets 19% on opening day

Thailand: Banpu Power's IPO skyrockets 19% on opening day

The first day of Banpu Power Plc's (BPP) initial public offering (IPO)
yesterday was well-received by investors, indicating the power-generating
business remains a popular sector for investment.

BPP is the power-generating subsidiary of Banpu Plc, Thailand's largest coal
miner.

Voravudhi Linananda, chief executive of BPP, said the company raised 13.6
billion baht in funds from the IPO thus far.

The price of the IPO, set at 21 baht per share, rose by 18.5% to 24.90 baht
in trading, reflecting strong demand.

BPP invests in domestic and overseas power-generating businesses and has a
market capitalisation of 63.96 billion baht at its IPO.

The company has paid-up registered capital of 30.5 billion baht, consisting
of 2.3 billion baht worth of existing common shares and 648.5 million newly
issued shares.

"BPP's share price increased 18.6% because of investors' confidence that the
power business has high potential and will continue to grow in both the
domestic and overseas markets. It is a sunrise business and is trendy," said
Mr Voravudhi.

He said some 12 billion baht raised from the IPO would be used to pay debt
and another 1 billion is for new investment in renewable energy and
power-generating business.

The company is focused on investment in China, Japan, Indonesia, Vietnam and
Laos, where power demand remains strong and governments are attracting
foreign investors, said Mr Voravudhi.

BPP expects its power-generating capacity to reach 2,500 megawatts in 2018,
up from 1,913MW now. The company wants to raise capacity to 4,300MW by 2025.

"New projects in China and Japan should help us reach our 2,500MW goal in
2018. More than 1,000MW from renewable power is expected to be added to
enable the company to meet our total capacity target of 4,300MW by 2025," he
said.

For the renewable energy sector, he said BPP is interested in biomass and
biogas power because it offers quicker return on investment than other
options, said Mr Voravudhi.

He said the company set aside around US$70-75 million for investments in
2017-18 and another $700 million for investment from 2018-2025.

Parent company Banpu is considering investment in another shale gas
operation in Pennsylvania in the US.

"We are considering whether to invest in a new gas operation in the US, so
now we are doing research to complete our due diligence," said Somruedee
Chaimongkol, president and chief executive of Banpu.

Ms Somruedee said Banpu is also mulling a plan to buy an additional 5% stake
from a US investor who is one of the partners in the Chaffee Corners Joint
Exploration Agreement.

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Ref:
http://www.bangkokpost.com/business/news/1121941/banpu-powers-ipo-skyrockets
-19-on-opening-day

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com