PSTC holds off on Big Gas stock listing

MAI-listed Power Solution Technologies Plc (PSTC) has decided to put off a listing plan for subsidiary Big Gas Technology Co, citing an unattractive climate for retail investors in the stock market.

PSTC is a power business operator and service provider. On Tuesday, the company’s board of directors agreed to buy the remaining 49% stake in Big Gas from BGT Holdings to take over the entirety of Big Gas. PSTC holds a 51% stake at present.

PSTC chairman Panu Seetisarn said the company decided to suspend the listing plan because the stock market has turned bearish in terms of return on investment.

In 2017, PSTC planned to list Big Gas on the stock market after acquiring the 51% stake. Under the plan, PSTC would float 25% of the shareholding in Big Gas via an initial public offering.

But financial adviser Finansia Syrus Securities has estimated the proceeds from such an IPO at 500 million baht, down from a previous estimate of 2 billion baht.

A decision was made to revamp and restructure Big Gas and PSTC before listing.

Mr Panu said the listing plan doubled PSTC’s administrative expense to 30 million baht a year and led to a drop in operating performance at both companies.

“PSTC has also witnessed many listing plans of other companies in cases of spun-off business units between parent companies and subsidiaries,” he said. “After listing on the stock market, the parent firms had such a flat financial performance, but the listed subsidiaries outperformed enough to be attractive to investors.”

Mr Panu said PSTC will restructure Big Gas, then merge into a single company and shift from the Market for Alternative Investment to the Stock Exchange of Thailand.

“The merger plan will be discussed on Friday between the boards of directors from PSTC and Big Gas,” he said. “The merger purpose is to operate all business units in flexibility and lean the operating costs by making new products and services.”

Mr Panu said he expects PSTC to grow significantly during 2019-20 on the strength of five core competencies: energy management, power plant operations, liquefied natural gas retailing, oil pipelines and construction services.

For 2019, PSTC sees revenue growth of 30% to 3.5 billion baht.