The SET-listed PTT Plc, Thailand's energy flagship, expects to introduce US-dollar-denominated debentures worth up to US$2 billion to take advantage of high liquidity and low interest rates in the US.
The 10-year bond issue is expected by the end of this month or early next month, said chief financial officer Surong Bulakul.
Proceeds from the debentures will finance business expansion at PTT and support the capital increase of PTT Exploration and Production Plc. Details of the debentures will be finalised next week.
"Now is a good time to launch the debentures, as the US economy is recovering and China is seeing a slowdown while the political situation in Thailand has stabilised," said Mr Surong.
He said big flooding is unlikely this year, and the stock market is in good shape, with the SET index closing near 1,300 points yesterday.
Previous debentures by PTT have an average maturity of seven years, but a length of 10 years is better suited for the longer-term plans of the company.
Foreign investors have shown confidence in the company's debentures, said Mr Surong.
Last month, PTT Global Chemical Plc, the petrochemical production arm, launched a foreign debenture worth $1 billion in the US.
The debenture was welcomed with demand exceeding units offered by 11 times.
PTT, meanwhile, launched debentures worth 45 billion baht in local bonds in the first half of this year.
Mr Surong said Dubai crude is expected to stabilise at $105-110 a barrel for the rest of year.
Saudi Arabia and other members of the Organization of Petroleum Exporting Countries would like to see the price stay stay at about $100 per barrel.But prices will adjust according to seasonal demand in the fourth quarter.
"If the weather gets colder, then oil demand will surge and push the price upward," said Mr Surong.
In a related development, PTT has received the 2012 Oil and Gas Award for Process Optimisation Excellence from Boston Strategies International.
PTT has used AspenTech's engineering simulation software to raise output at its Rayong gas separation plant, the largest facility of its kind in Thailand.
Using the software, the plant can increase production to 126,000 tonnes a year and minimise production costs per tonne, resulting in an increase in profitability of more than $16 million a year.
Shares of PTT closed yesterday on the Stock Exchange of Thailand at 315 baht, unchanged, in heavy trade worth 1.63 billion baht.
About the author
- Writer: Soonya Vanichkorn