PTT Plc has acquired an additional stake in IRPC, the Government Savings Bank's (GSB) petrochemical business arm, for 13.8 billion baht after seven years of negotiations.
The executive boards of PTT and GSB approved the deal Wednesday at a cost of 7.1 baht per share. The transaction will increase PTT's ownership in IRPC to 48% from 35%.
The national oil conglomerate is expected to transfer money for the purchase by Friday.
Tevin Vongvanich, president and chief executive of PTT, said GSB acquired IRPC at a price of 3.3 baht per share during the financial restructuring of what was formerly known as Thai Petrochemical Industries Plc (TPI) in 2007.
The company changed its name to IRPC after the acquisition.
GSB had expressed an interest in returning to its core business for many years, but this is the appropriate time because IRPC has already invested in a variety of programmes to enhance its efficiency, he said.
The company is reaping the returns of a long investment period, said Mr Tevin.
PTT plans to split its par price per share from 10 baht to 1 baht per unit, in a bid to enable small investors to acquire shares on the Stock Exchange of Thailand. The splitting programme is expected to become effective in April.
Small investors own 4% of PTT shares, down from 7% during its first year of trading.
PTT shares have soared above 500 baht per unit since January. Financial experts say the stock is overvalued.
"We want small investors to hold 7% of our shares as they did in our first year," said Mr Tevin.
PTT estimates global oil prices this year will hit a range of US$60-65 per barrel, above the previous estimate of $55.
Extreme weather fluctuations across the world may fuel rising global demand, which will result in shale oil and gas operators in North America to resume drilling as oil prices rise.
On Tuesday, PTT announced a record consolidated net profit of 135 billion baht for last year, up 42.9% from the 94.6 billion baht generated in 2016. Total revenue increased 16% to 2 trillion baht, also a new high.
The increase was driven by improved performance of the listed company and its subsidiaries. Global oil prices rose 28.8% to $53.3 per barrel.
PTT's board resolved to establish a wholly-owned subsidiary, PTT Treasury Centre Co, a financial management unit that will conduct business abroad on behalf of PTT Group.
PTT shares closed Wednesday on the SET at 522 baht, up 32 baht, in trade worth 17.3 billion baht.
