EDL-Generation readies 3rd Thai fundraising event

EDL-Generation Plc, a state-owned Laotian enterprise for wholesale electricity generation, has prepared for its third fundraising event in Thailand through debenture issuance worth $US550 million (17.6 billion baht).

The proceeds will be used for share acquisition of 20% each in Xayaburi HPP and Don Sahong HPP from Electricite du Laos (EDL), which will result in an additional 309 megawatts being added to EDL-Generation’s capacity, which stands at 1,137MW.

“Investment in the two projects is worth $450 million. Twin Pine Group has been appointed as the financial adviser to study the capital-raising process, covering the debentures’ maturity date in 2019 and additional working capital,” said Bounsalong Southidara, chief financial officer and deputy managing director.

“The total fund-raising size is $550 million, for which approval was already granted at a shareholders’ meeting and by the Laotian finance ministry.”

Xayaburi HPP is expected to sell electricity by 2019 with installed capacity of 1,285MW, while Don Sahong HPP has installed capacity of 260MW.

EDL-Generation owns a combined 16 hydropower and solar power projects, with total production capacity of 1,137MW.

Ten of those projects with capacity of 619MW are wholly owned by the company, while the rest, including one solar power project, are joint ventures.

Adisorn Singhsacha, Twin Pine Group chief executive, said EDL-Generation’s debt per equity is 1.1 times, allowing for capital to be raised through debenture issuance.

After studying capital-raising methods, the amount of $550 million was determined to be suitable, said Mr Adisorn.

EDL-Generation has issued debentures in baht and US dollars in Thailand twice, with demand surpassing the fund-raising amount.

“Debenture issuance of EDL-Generation in Thailand has been successful, but they were only bought by institutional investors. The amount of the previous debenture was not sufficient for high net worth individuals in Thailand,” he said.

“The amount raised this time is much higher than the first two issuances, creating an opportunity for high net worth individuals in Thailand to invest. The company will determine the rate of return, lead underwriter and distribution method, which are expected to be completed this quarter so that offering can commence in the third quarter.”