WP to acquire 80% of Thai Gas, increase LPG reach

WP to acquire 80% of Thai Gas, increase LPG reach

WP Energy Plc, the SET-listed liquefied petroleum gas (LPG) trader, will invest in Thai Gas Corporation (TGC) to increase its assets, margin and long-run return for shareholders.

Yesterday WP submitted a letter to the Stock Exchange of Thailand (SET) that it will make a transaction through a subsidiary, WP Gas Co, to acquire 80% of the total shares in TGC from its four existing shareholders at a price of 154.24 baht per share, totalling 168.8 million baht.

TGC is a major operator in LPG distribution, ranking seventh with a sales volume of 83,000 tonnes per year, according to the Energy Business Department. TGC is owned by members of the Laosirichon and Aphiphunya families.

The company has LPG storage with a capacity of 1,800 tonnes, located on a plot of 10 rai under a leasehold agreement by Phichit Industrial Estate Authority.

TGC's subsidiary Premier Carrier Co provides gas and fuel transport.

Last year, TGC posted revenue of 1.66 billion baht and net profit of 17.1 million.

WP expects the acquisition will be completed in the first quarter in 2019. Veerapong Laosirichon will own the remaining 20% stake.

Chomkamol Poompanmoung, deputy chief executive of WP, said this acquisition gives the company an opportunity to expand in the LPG business, particularly for storage it can use immediately.

"TGC's assets in Phichit province include leftover storage area and WP aims to increase LPG storage to 2,000 tonnes in the near future, cutting our rental storage cost as WP must reserve LPG by law for the volume required," she said.

"Phichit is also a strategic province in the lower northern region from which WP can expand its LPG customers."

Ms Chomkamol said the acquisition provides synergy and the Thai Gas brand remains unchanged.

The expansion is part of WP's proposal to the SET, and WP shares are allowed to resume trading on Feb 1.

The SET said there was a possibility of de-listing WP last month, but the company has complied with the bourse's regulations and improved its financial status.


Do you like the content of this article?
COMMENT

Tougher 'intent to supply' meth law to go ahead

The Ministry of Public Health will press ahead with a controversial amendment that would make possession of more than one methamphetamine pill dealing in illegal narcotics.

18:53

MD critical of ministry policies replaced

A new director has been selected to succeed outspoken government critic Dr Supat Hasuwannakit at Chana Hospital in Songkhla, a senior public health official said on Wednesday.

18:46

No sign of German who jumped from Koh Phangan ferry

SURAT THANI: The search resumed on Wednesday for a 35-year-old German tourist who jumped into the sea near Koh Phangan on Tuesday night, but he has not been found.

18:31