BCP delays IPO debut on uncertainty

Volatile stock market puts plan in doubt

SET-listed energy firm Bangchak Corporation Plc (BCP) will delay an IPO plan for BBGI Plc on the stock market until the second half of 2019, saying the bourse is too volatile for new listings.

BBGI is set up for full integration of biofuel production, mainly methyl ester from crude palm oil. The company is a joint venture of BCP and Khon Kaen Sugar Industry Plc (KSL), one of Thailand’s largest sugar millers.

BCP holds a 60% stake in BBGI, while KSL owns the remaining portion.

Chaiwat Kovavisarach, BCP’s president and chief executive, said the original listing plan for BBGI was for the fourth quarter of 2018 or the first quarter of 2019.

“We have to postpone the listing because stock market sentiments are highly volatile and the overall economic outlook is not strong enough to commit to the plan,” he said.

In May, BBGI submitted a filing to the Securities and Exchange Commission to float 216.6 million newly issued shares, representing 30% of BBGI’s total shares.

Finansa Securities Co, Bualuang Securities and Kasikorn Securities are BBGI’s financial advisers on the IPO.

The IPO is expected to fund the expansion of an existing biofuel production plant, new project investment and the refinancing of BBGI’s debt.

BBGI’s plan is set for the second generation of biofuels that will be sourced by waste agricultural products such as sugar cane, rice leaf, wood scrap and cassava scrap.

The waste used for the new biofuel system will use cellulosic processing that BBGI is designing and conducting a feasibility study of.

Part of the IPO funds will go towards the commercial production of new raw materials such as green and red algae for supplements, animal feed and skincare.

The production of green and red algae is being piloted at the plant in Ratchaburi province.

This algae pilot plant is a joint venture of BCP, Loxley Plc and Ratchaburi Electricity Generating Holding, with each company holding a 33.3% stake.

Mr Chaiwat said the bio-based products of BBGI will include polymer for degradable plastic.

Furthermore, BBGI’s announced in August that it aimed to spend 1.5 billion baht to increase its ethanol production capacity to 800 kilolitres per day (KPD) from 500, with an operating date in 2019.

BBGI plans to i ncrease ethanol capacity to 1,000 KPD in the next couple of years.

The BBGI expansion is part of BCP’s investment plan worth 77 billion baht during 2019-22.

BCP plans to expand and develop both domestically and overseas over the next four years.

BCP operates five business units: oil refining, marketing, renewable energy, bio-based products and natural resources.