PTT Plc agreed to sell 15% of all Bangchak Petroleum Plc shares to the state-owned Vayupak Fund.
With a 27.22% stake, the oil and gas conglomerate was Bangchak's largest shareholder as of the latest shareholders' book closing date on Sept 9, 2014, according to stock market data.
The move is part of PTT's programme to diversify Thailand's oil sector by selling its large stakes in major industry players. PTT is a major shareholder in five of Thailand's six oil refineries.
PTT chief executive Pailin Chuchottaworn said PTT's remaining 12.2% stake in Bangchak will likely be sold to another bidder. He declined to name suitors.
An industry source, however, said potential bidders included Mermaid Maritime Plc, a subsidiary of Thailand-based shipping group Thoresen Thai Agencies Plc (TTA), and senior management at BCP. The source said TTA, Susco Plc and PTG Energy Plc had withdrawn their bids.
The share sale to Vayupak is expected to close after negotiations with potential investors are finalised at the end of this quarter.
Mr Pailin said PTT estimated it would receive more than 10 billion baht in cash from the share sale.
With the fund owning 15% of BCP after the deal, the state will remain the major shareholder in BCP. Other major shareholders in Bangchak as of September last year were the Finance Ministry (9.98%) and the Social Security Fund (1.93%). The other major shareholders mostly were overseas funds and commercial banks.
The next step for PTT will be to spin off its 36% ownership of Star Petroleum Refining Co through a listing on the Stock Exchange of Thailand. The sale is expected in the second half of this year.
PTT share price jumped 4.23% to 370 baht in trade wirth 2.5 billion baht while Bangchak shares (BCP) closed up 1.48% to 34.25 baht in trade worth 89.78 million baht on Tuesday.