SPRC scales back on number of IPO shares
PTT spin-off to begin trading in December
Star Petroleum Refining (SPRC) will sell 1.439 billion shares at nine baht each for its initial public offering (IPO), with trading expected to start by the second week of December.
PTT Plc, the national oil and gas conglomerate, is spinning off a 36% stake to dilute its ownership of SPRC.
The number of shares to be sold is lower than the 1.735 billion announced earlier, said PTT chief executive Tevin Vongvanich.
But the company will not offer a greenshoe option that lets investors buy more shares than originally planned by the issuer.
“We expect investors to book shares above the number that we want to sell, which would make our share prices stable and reliable because the company has good fundamentals,” Mr Tevin said. Trading is likely to begin on Dec 8. After the IPO, PTT ownership in SPRC will drop from 36% to 5.4%.
Chevron South Asia Holdings Pte will remain SPRC’s majority shareholder with a 57.42% interest, down from 64% pre-IPO.
Anuwat Ruamsuke, assistant managing director of Phatra Securities, SPRC’s financial adviser, said 70% of the SPRC shares will be sold to institutional investors, which largely invest in a prudent manner and for a longer term of investment.
The trend of falling global oil prices is unlikely to have a negative impact on SPRC’s share sale, Mr Anuwat said, as the company runs a business in which revenue and profit is based on gross refining margin.
“The company’s gross refining margin remains high,” he said. “In contrast, falling oil prices should allow the company to expand the market as the cost of crude oil is falling.”
Another analyst termed SPRC’s shares “interesting” and offering a reasonable price.
The analyst, who asked not to be named, expects a greater booking than the 1.439 billion shares the company plans to sell.
Thailand has six refineries. SPRC accounts for 13% of the country’s refining capacity and supplies nearly a third of petrol demand.