Thai Agro Energy Plc (TAE), the country's third-largest ethanol manufacturer, is set to allocate 296.04 million initial public offering (IPO) shares to the public in the second quarter to fund its three-megawatt biogas power plant.
Of the total IPO shares, 200 million are newly issued, while the rest will be sold by its parent Lanna Resources Plc.
Following the offering, the company's paid-up capital will be raised to 1 billion baht, while shareholding of Lanna and of the two founding families — the Jaturapruks and Limwattanakuls — will be diluted to 51% from 75% and to 7.39% from 9.25%, respectively.
TAE will seek a listing on the Stock Exchange of Thailand in the second quarter.
Apart from the biogas power plant, the company plans to utilise proceeds from the IPO to repay debts and as reserve working capital.
Its debt-to-equity ratio after the IPO will decline to 1.2 times from 1.6 times at present. The company's book value per share at the end of last year stood at 1.10 baht.
Somphop Keerasuntonpong, president at Finansia Syrus Securities, said 105.037 million IPO shares will be allotted to Lanna's shareholders, while the remaining 191 million will be sold to the public.
Finansia Syrus Securities is acting as financial adviser for TAE's IPO offering.
The company has annual production capacity of almost 121 million litres, just behind Mitr Phol Group and Ubon Bio Ethanol.
It produces ethanol from molasses and cassava, and its customers include PTT, Bangchak, Esso (Thailand) and Thaioil.
Chief executive Somchai Lovisuth said the biogas power plant will supply TAE's ethanol plant.
The power plant has two phases expected to start feeding power to the grid by the third quarter and year-end.
"The biogas power plant will help the company to cut electricity costs by 7 million baht a month," he said.
The company expects 30% revenue growth this year, with record revenue and profit levels.
Last year it achieved sales revenue of 1.66 billion baht, up by 22.9% from 2012, for a net profit of 166 million, up by 40.7%.