Amata B.Grimm Power Ltd, majority owned by the local trading conglomerate B.Grimm, has priced its 600 million initial public offering (IPO) trust units of its infrastructure fund at an indicative range of 10.50 to 11 baht.
Kasikorn Asset Management executive chairman Chongrak Rattanapian (right), Amata B.Grimm Power president and executive chairman Preeyanart Soontornwata (centre) and Kasikornbank investment banking head Suradech Kietthanakorn (left) attend a press briefing about the Amata B.Grimm Power Infrastructure Fund (ABPIF). SOMCHAI POOMLARD
The IPO is expected to generate up to 6.5 billion baht to finance the company's business expansion.
The Amata B.Grimm Power Infrastructure Fund (ABPIF), with two power plant projects _ Amata B.Grimm Power 1 and 2 _ as underlying assets, will emerge as the country's second infrastructure fund after the BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF) raised 62.5 billion baht from its April IPO.
Subscription has been set for Sept 9-13, with the final IPO price to be concluded by Sept 15.
Proceeds will be used to build two or three new power plants to keep pace with the country's rising electricity demand.
The company will hold at least a 27.5% stake in the fund, for which Kasikornbank has been appointed as an underwriter.
Preeyanart Soontornwata, the president and executive chairman, said Amata Power 1 and 2 have operated for 11 years with combined capacity of 363 megawatts.
Half of that is sold to the Electricity Generating Authority of Thailand (Egat) and the rest to customers in Amata industrial estates.
"The electricity purchase contract with Egat will end in 2022. For the remaining nine years, the ABPIF is expected to generate annual returns of 7-8% to unitholders," said Mrs Preeyanart.
Over the past four years, the two power plants have contributed combined annual revenue of 7-8 billion baht on average, 1.3 billion in earnings before interest, tax, depreciation and amortisation each year and annual net profits of 550-600 million.
Building new plants is part of company plans to set up 16 new power plants by 2019, boosting electricity generation capacity to 2,000 MW at a total cost of 70 billion baht.
Amata B.Grimm Power is classified as a small power producer.
Mrs Preeyanart said the Asean Economic Community should boost Thailand's power demand. From 1969-2011, the country's electricity demand grew by 9% per year on average.