Global Power Synergy Plc (GPSC) Plc is considering de-listing Glow Energy Plc from the stock market after GPSC completes the takeover process of Glow in the first half of 2019.
On Thursday, both listed companies submitted letters to the Stock Exchange of Thailand (SET) saying GPSC had completed the sale and purchase agreement of Glow shares owned by Engie Global Development BV.
France's Engie held Glow shares both directly and indirectly, amounting to 1.011 billion shares or 69.11% of Glow's issued shares on the stock market.
GPSC agreed to buy at 91.99 baht per share, spending roughly 93 billion baht for the acquisition.
According to GPSC's statement, it will proceed with the tender offer for all remaining shares at 451.9 million shares or 30.89% of Glow's issued shares.
The purchasing price will be similar to the completed agreement, so GPSC will prepare a budget of 41.57 billion baht for the tender offer process.
GPSC will make the tender offer submission on March 22.
Chawalit Tippawanich, GPSC's president and chief executive, said the acquisition process comes as GPSC plans to take over all of Glow's shares.
"It is a possibility to de-list Glow from the SET because GPSC will own more than an 80% stake in Glow, but we have to complete the tender offer process before making a decision," Mr Chawalit said. "We need to spend a year studying many business possibilities and directions from this takeover deal. Glow will be either positioned as a GPSC subsidiary or merged under GPSC's management."
He said GPSC and Glow are quite different in terms of business direction in the country's power sector.
Glow is strong as an independent power producer (IPP) with a larger power capacity, compared with GPSC's competitiveness in renewable power and energy storage.
Glow has a power capacity of 2.77 gigawatts, while GPSC has 1.96GW.
The state-run Electricity Generating Authority of Thailand (Egat) has the largest power capacity at 16.01GW.
Among private power companies, Ratchaburi Electricity Generating Holding Plc takes the top spot with 8.02GW, followed by Gulf Energy Development Plc at 5.3GW and Electricity Generating Plc (Egco) at 4.26GW.
Upon merging Glow's assets into GPSC, the resulting operations will be ranked the third producer among the country's power companies with 4.73GW, surpassing Egco.
"All of Glow's assets are expected to be secure in GPSC's revenue from 2019 on, while GPSC aims to remain in the top three private power producers," Mr Chawalit said.
Engie also announced the completion of the disposal of Glow, with HSBC as financial adviser.
After the disposal, Engie will no longer have any coal assets in Asia-Pacific.
HSBC said the takeover deal between Glow and GPSC is the largest-ever M&A deal in the power, utilities and renewables sectors in Southeast Asia.
It is Thailand's second-largest M&A transaction since 2013 after Casino's share sale of Big C in 2016, HSBC said.
Wanida Boonpiraks, GPSC's executive vice-president, said GPSC needs to allocate a total budget of 135 billion baht for all acquisitions.
"We received two funding resources, cash on hand from our shareholders, PTT Global and Chemical Plc and PTT Plc, expecting to finance roughly 35 billion baht," she said. "The remaining budget of 100 billion baht will come from a syndicated loan of five local financial institutions."
Mrs Wanida said GPSC's debt-to-equity ratio is expected to reach 3 in the third quarter, but GPSC plans to increase registered capital soon to repay debt from the acquisition.
