Gunkul looking at fund

Gunkul looking at fund

SET-listed engineering construction firm Gunkul Engineering Plc is doing a feasibility study to set up an infrastructure fund for future investment.

Managing director Somboon Aueatchasai said it had assigned Siam Commercial Bank to conduct a study entailing fundraising methods, with the final draft expected to be announced to the public in the second half of next year.

Tentatively, the size of the fund would be around 5 billion baht and the company would put down its wind farms projects as collateral.

It has three wind farm projects that are still under construction and are expected to begin commercial operations by the third quarter of this year, he said.

"We have seen that the Thai capital market is opening up and it has high liquidity [for setting up the infrastructure fund]," said Mr Somboon.

Since the company needs a large sum for capital expenditure over the coming years, it also plans to issue a debenture worth around 2.7 billion baht, he said.

Volatility as well as the low profit margin of the construction and trading business have forced Gunkul to diversify into renewable energy, including bids for solar and wind farm licences.

It currently has power purchase agreements (PPAs) totalling 336 megawatts.

Most of its development licences are for projects that are under construction and expected to start commercial operations by the end of this year.

Gunkul aims to have renewable energy capacity of 400MW by 2017.

It also plans an expansion of its renewable energy capacity in Japan, Malaysia, Myanmar and India.

Power generating capacity from its solar farm projects in Japan is expected to hit 125MW next year, up from 75MW, said Mr Somboon.

By 2020 Gunkul aims to have PPAs totalling 1,000MW, all from renewable energy.

Chief finance officer Thitipong Techaratanayuenyong said 83% of total revenue would be from renewable energy by 2018, up from 55%.

"We want to move out from a highly fluctuating, low margin business into one with concrete, high returns, so we are fully diversifying into renewable energy," said Mr Thitipong.

GUNKUL shares closed on the Stock Exchange of Thailand yesterday at 5.60 baht, down 15 satang, in trade worth 91.2 million baht.

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