Thailand: B.Grimm eyes B10bn from IPO

Thailand: B.Grimm eyes B10bn from IPO

B.Grimm Power Plc plans to raise up to 10 billion baht from its initial
public offering (IPO), says Nopadej Karnasuta, the company's chief financial
officer.

The amount would be the largest fundraising sum for the power-generating
business arm of B.Grimm Group.

Mr Nopadej said the company is close to finalising the price of the IPO of
716.9 million shares, or around 27.5%, of paid-up capital. Some 60% of the
total IPO would be set aside for foreign investors, while the remaining 40%
would be for domestic investors.

He said the company expects to raise more than 10 billion baht in fresh
funds with which to expand capacity.

Chief executive Preeyanart Soontornwata said B.Grimm planned to allocate
about 55 billion baht of capital expenditure over the next five years to
increase its committed power purchase agreement by 43% to 2,357 megawatts,
up from 1,646MW at the end of the first quarter.

The additional capacity would be from 13 power plants, which are mostly
gas-fired small power plants, and hydropower plants in Laos.

Of the expected 10 billion baht, around 8-9 billion is set to be used to
refinance debt, with 1-2 billion used for working capital.

Ms Preeyanart said the debt repayment was aimed at reducing its
debt-to-equity (D/E) ratio to 1.5 times from the current 2 times in three
years. It also plans to issue a 35-billion-baht debenture over the next
three years.

Funds raised by the IPO are expected to help reduce financial costs from
5.6% to 3.76% for the development of three new small power plants.

Ms Preeyanart said B.Grimm is planning to invest in solar rooftop and hybrid
renewable power projects at home, despite the market being close to the
saturation point.

For long-term investment, she said B.Grimm recently signed a memorandum of
understanding to develop renewable power projects with China Energy
Engineering Corporation, particularly solar-hybrid power systems. The
cooperation is part of its 5,000MW power capacity expansion using both
fossil and renewable resources.

The company also established a partnership with Poipet PPSEZ Co, the
developer and operator of the Poipet Special Economic Zone in Cambodia. The
company has qualified for 2017 solar energy projects with government
agencies and agricultural credit cooperatives, reinforcing its status as one
of the country's leading power companies.

B.Grimm reported its first-quarter revenue increased 12.8% year-on-year from
7.65 billion baht, generating 2.13 billion in earnings before interest,
taxes, depreciation and amortisation, up 27.9%, thanks to effective cost
management. The company recorded a net profit of 1.1 billion baht, up 16.8%
year-on-year.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1263963/b-grimm-eyes-b10bn-from-ipo

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com