Selling 2% of PTT to reduce govt ownership from 51% to 49% to erase govt debt so govt can borrow more to finance flood-prevention infrastructure.
ENTERPRISES: State may reduce PTT, THAI stakes by Nareerat Wiriyapong
The government is considering whether to reduce its stake in PTT Plc and Thai Airways International Plc (THAI) in order to cut public debt.
Virabongsa Ramangkura, chairman of the Strategic Committee for Reconstruction and Future Development, said the government may sell a 2% stake in PTT, the biggest listed company on the Stock Exchange of Thailand, to the state-controlled Vayupak Fund. The government currently controls 51% of PTT, with the Vayupak Fund holding 15%.
The energy giant reported total consolidated liabilities of 756 billion baht as of the end of September 2011, with company liabilities of 459 billion.
"Reducing government ownership to 49% means PTT would no longer be a state enterprise and the company's debt would not be considered public debt," Dr Virabongsa said at yesterday's CEO Forum at the BoI Fair.
In addition, the state aims to dilute its shares in THAI. The national carrier is 200 billion baht in debt.
"The THAI case may be a bit difficult, as we have to hold talks with the labour union," Dr Virabongsa said.
The committee will propose the stake sale to the government.
The plan is designed to ease mobilisation of 350 billion baht in state funds to finance flood-prevention infrastructure.
"Without the liabilities of state enterprises, the government's debt is as low as 1% of gross domestic product," said Dr Virabongsa.
Deputy Prime Minister Kittiratt Na-Ranong said the government has discussed the sale of state-enterprise shares to the Vayupak Fund but does not consider it an urgent issue.
The fund was set up in 2003 with seed money of 100 billion baht. It has been allowed to invest only in shares of state enterprises held by the Finance Ministry.
Among the shares it has held are those of PTT, THAI, Krung Thai Bank and Siam Commercial Bank. Today the fund is worth 300 billion baht.
The Vayupak Fund offered unitholders a 3% annual yield guarantee when it was first established.
The cabinet gave a green light late last year for the use of the 300-billion-baht Vayupak Fund as a financial tool to raise funds for the country's future development and investment.
The ceiling of public debt to GDP is 60%, and the ratio is 40% at present.
(Source: Bangkok Post, ENTERPRISES, State may reduce PTT, THAI stakes, 18/01/2012, Nareerat Wiriyapong, link)
State Enterprise Vocabulary
state enterprise - a company owned and operated by the government (sometimes not 100% ownership)
enterprise - an organization, especially a business กิจการ, บริษัท,อุตสาหกิจ,วิสาหกิจ
state - government รัฐ
debt - an amount of money that you owe หนี้
public debt - money that the government borrowed to pay for government spending (to cover a government spending "deficit" when tax revenue was not enough to pay for government spending)
cut public debt - reduce public debt
government debt - same as "public debt"
Reducing government ownership to 49% means PTT would no longer be a state enterprise and the company's debt would not be considered public debt
stake - owning part of a company; a share or a financial involvement in something such as a business
reduce stake - reduce ownership of a company (owner sells stock shares)
a stake in PTT Plc - owning part of the company PTT (holding stock shares of the company)
reduce its stake in PTT Plc
the government may sell a 2% stake in PTT
stake sale - selling part of a company that you own (selling stock shares of a company)
the committee will propose the stake sale to the government.
Vayupak Fund - a fund set up by the Thai government in 2003 to raise money directly from the public and bypass commercial banks (See previous articles #1 & #2)
the state-controlled Vayupak Fund
unitholders - investors who own one part or share of the investment fund
annual - happening once a year ประจำปี
yield - return on investment, the amount of money that an investor receives for making an investment
guarantee - a promise that something will be done or will happen คำรับรอง, การประกัน (See glossary)
3% annual yield guarantee
established - created
the Vayupak Fund offered unitholders a 3% annual yield guarantee when it was first established
listed company on the Stock Exchange of Thailand - the stock shares of the company are bought and sold on the stock exchange (information about the company and its finances, profit and loss, assets, liabilities must also be provided to the public)
energy - electricity and gasoline and other such goods that make cars and machines work
energy giant - a very large energy company
liabilities - money that a company has borrowed, debt (versus equity contributed by owners who hold the stock shares of the company) หนี้สิน money that a company owes to others หนี้ขององค์กร money borrowed by a company (company balance sheet shows its financial position: liabilities + owners' equity = assets)
consolidate - to combine the financial accounting results of a group of companies into one set of figures or numbers (for an annual financial report, for example)
consolidated liabilities - the debt of all PTT subsidiaries (the smaller companies that together form the larger company PTT)
the energy giant reported total consolidated liabilities of 756 billion baht
without the liabilities of state enterprises, the government's debt is as low as 1% of gross domestic product
domestic - within the country ภายในประเทศ
Gross Domestic Product (GDP) - the total value of all the goods and services produced by a country in one year (See Wikipedia)
dilute - 1. reduce an amount of something you have; 2. mix with water; make some liquid less strong by mixing water with it
dilute shares - reduce the amount of stock shares of a company that you own
the state aims to dilute its shares in THAI
national carrier - the national airline of a country, often at least partially owned by the government (Example: Thai Aiwrways is the national carrier of Thailand)
talks - negotiations, formal discussions of problems between different sides in a conflict in order to solve the problem
labour union - an organization of workers, usually in a particular industry, that exists to protect their interests, improve conditions of work, etc; often called a "trade union" or just "union" (See Wikipedia)
hold talks with the labour union
ease - to make something easier ทำให้ง่าย
funds - money needed or available to spend on something เงินทุน
ease mobilisation of funds - make it easier for some amount of money to become available for use
state funds - money from the government
finance - to provide money for something, such as a project or business จัดหาเงินทุนให้
prevention - the act of stopping something bad from happening (example: the government disease prevention programme)
infrastructure - the high-cost facilities that everyone in the economy shares (water, roads, electricity, trains) สาธารณูปโภค
finance flood-prevention infrastructure
the plan is designed to ease mobilisation of 350 billion baht in state funds to finance flood-prevention infrastructure
urgent - must happen quickly, needing to be dealt with immediately ที่เร่งด่วน
issue - a problem that needs to be considered, dealth with and solved ประเด็น
does not consider it an urgent issue
seed - helping bring something into existence (example: seed of a plant); the cause of something happening ต้นกำเนิด
seed money - the first or starting money used to begin a company, organization or project
the fund was set up in 2003 with seed money of 100 billion baht.
gave a green light - gave permission for something to happen
development - the gradual growth and formation of something
investment - taking your money and putting it into projects to make a profit or earn interest (buying stock shares, bonds, real estate)
the cabinet gave a green light late last year for the use of the 300-billion-baht Vayupak Fund as a financial tool to raise funds for the country's future development and investment.
ceiling - an upper limit เพดาน ขีดจำกัด
the ceiling of public debt to GDP is 60%, and the ratio is 40% at present.