SET-listed Global Power Synergy Plc (GPSC), a power business arm of national oil and gas conglomerate PTT Plc, is conducting a debt restructuring programme to cut financial costs after taking over Glow Energy Plc in the second quarter this year.
Siam Commercial Bank and Phatra Securities will advise the programme and are familiar with the details.
Toemchai Bunnag, president and chief executive of GPSC, said the takeover deal was worth 139 billion baht, with 105 billion coming from short-term loans from financial institutions.
The remainder was cash on hand from the PTT Group of companies: PTT, Thai Oil and PTT Global Chemical.
The debt restructuring was expected to take place soon after GPSC shareholders approved the programme at an extraordinary general meeting yesterday. They considered the takeover deal and the obtaining of short-term loans for the deal payment.
The votes were unanimous at the meeting.
"GPSC aims to close the share purchase of 69.11% of Glow from the parent French firm Engie Group by November," Mr Toemchai said.
The remaining 30.89% of shares will be purchased through a tender offer, expected to be completed by the first quarter of 2019.
After GPSC completes the acquisition, it will increase its power capacity by 53% to 4,425 megawatts from 2,895MW. This will make GPSC the third-largest private power producer in Thailand, behind Ratchaburi Electricity Generating Holding Plc and Electricity Generating Plc.
GPSC aims to diversify its electricity buyers, shifting from the PTT Group to state power utilities and business operators. The move also diversifies its fuel sources from natural gas.
The company's power plants rely on natural gas for 96% of generation, with solar farms providing 4%. The acquisition will reduce the contribution from natural gas to 68%, coal-fired plants providing 17% of the power, and hybrid and renewable energies at 15%.
"GPSC is waiting for a new power plant, granted from its sister firm Thai Oil, the country's largest oil refiner, that we aim to develop under Thai Oil's capacity expansion project, the Clean Fuel Project [CFP]," Mr Toemchai said.
Thai Oil plans to expand the oil refinery unit under the CFP to 400 kilobarrels per day from 275 KBD, using fired crude oil residues during the refinery process.
The new plant's capacity is designed for 250MW to feed the CFP, which has total development costs of US$4.83 billion (158 billion baht).
Mr Toemchai said GPSC is also conducting a feasibility study for a gas-to-power project in Myanmar, where GPSC plans to team up with another sister firm, PTT Exploration and Production, which is proposing that Myanmar's energy policymakers co-develop the project.
The tentative design includes the gas-fired power plant near the gas pipeline system in Myanmar, selling electricity to the local utilities, but further details must be finalised.
Piya Sukhumpanumet, general manager of PTTEP International Co in Yangon, said Myanmar's power market has high demand. The Yangon branch is expected to handle the gas supply for power generation.
PTTEP International in Yangon is the wholly owned subsidiary of PTT Exploration and Production in Myanmar.
"The project is set to add value to PTTEP's existing exploration and production business," Mr Piya said. "The site will be southwest of Yangon, with an offshore gas pipeline connected to the onshore facility."
