The merger between SET-listed companies Bangkok Expressway Plc (BECL) and Bangkok Metro Plc (BMCL) has been delayed for another six months due to the legislative process.
The companies are subsidiaries of Ch. Karnchang Plc (CK).
As they are construction companies that bid for government projects, making the government a party to their contracts, they need cabinet approval for the merger, BECL managing director Payao Marittanaporn said.
After the merger is completed, the new company will be allowed to start trading its shares on the Stock Exchange of Thailand.
"We had expected the cabinet to approve the merger by the third quarter of this year. If the government approves it soon, we expect things could be brought forward," Mrs Payao said.
The companies started their merger plans early this year to form a new company with improved liquidity and cash flow with market capitalisation of around 78 billion baht.
The merger was expected to create greater financial capability to pursue more projects, leading to higher profits this year, according to CK.
BECL is an operator of the expressway and BMCL operates the MRT mass transit network in Bangkok.
The merger was originally expected to be completed by the third quarter so that the new company would be ready to tap the government's infrastructure projects and capitalise on several infrastructure projects in neighbouring countries.
Mrs Payao declined to give the name of the new company created by the merger.
She said BECL's latest project, the 17-kilometre Si Rat-Outer Ring Road Expressway with an investment budget of 25 billion baht, was about 70% constructed and expected to be open for commercial operation to bring revenue to the company by next year.
BECL has signed an agreement with the government to share revenue only when the internal rate of return of the project is more than 13.5%. If not, there will be no revenue share for the government.
The company expects the new expressway will carry traffic of about 97,000 vehicles a day in the first year of operation.
BECL expects its revenue in the second half of this year to grow by 4% from 4.4 billion baht in the first half.
It forecasts revenue growth of 6% from last year's 8.5 billion baht thanks to busier traffic, with the number of expressway users increasing by 0.5% to 1.1 million vehicles a day.
"The company expects the country's political situation in the second half to be as placid as it was in the first half, which would be good for construction business and also good for the company's revenue," Mrs Payao said. "We hope there will not be any protests to block roads or hurt the economy again."