B.Grimm share price set at 16 baht
B.Grimm Power Plc, the power generation arm of Thailand’s oldest business conglomerate B.Grimm Group, has set the final price for its initial public offering (IPO) at 16 baht for BGRIM shares on the first day of trading, scheduled for July 19.
Chief executive Preeyanart Soontornwata said the company aims to float 716.9 million units, expecting to gain 11.47 billion baht, which will be one of the highest amounts of funds raised for an IPO this year.
She said the funds raised from the IPO will help strengthen the company’s financial status in preparation of future expansion.
The company plans to expand business domestically by investing in renewable power plants, fuelled by mixed renewable power resources, which are expected to be granted development licences soon.
Overseas, B.Grimm plans to focus in developing new power plants in the fast-growing economic zones of Cambodia, Laos and Malaysia, Ms Preeyanart said.
She said new B.Grimm power plants that are due to start commercial operations within the next two years total 400 megawatts in capacity and are expected generate about 10 billion baht in annual revenue.
The new power plants include the 20MW Xe Namnoy hydropower plant in Laos, which is due to start commercial operations by 2018, the 15MW Nam Che hydropower plant in Laos and another three power plants in Amata City in Rayong, with a combined capacity of 390MW.
After raising funds via the IPO, the company will be ready to expand into other power-related ventures through both mergers and acquisitions and greenfield projects, with stronger financial status, she said.
Chief finance official Nopadej Karnasuta said after the IPO is launched, the debt-to-equity ratio will reduce to two times from 3.4 times currently and could continue to drop to 1.5 times by 2019.
The number of IPO shares subscribed to by investors was higher than expected. Previously, the company allocated 77% of the shares for domestic and overseas institutional investors, while the remaining 23% was reserved for small investors.
Institutional investors were namely Asian Development Bank, Muang Thai Life Assurance and Thai Life Insurance.
B.Grimm plans to allocate about 55 billion baht to capital expenditures over the next five years to expand power generation commitments to state utilities through power purchasing agreements by 43% to 2,357MW from 1,646MW as of the end of the first quarter of this year.
The additional capacity will come from 13 power plants, mostly small gas-fired power plants and hydropower plants in Laos.
For longer term investment, Ms Preeyanart said B.Grimm recently signed a memorandum of understanding to be a strategic partner with China Energy Engineering Corporation, one of China’s biggest energy companies, to develop renewable power projects in the future.
Furthermore, the company has established a partnership with Poipet PPSEZ Co, the developer and operator of the Poipet Special Economic Zone in Cambodia for further business expansion.