The initial public offering (IPO) launch of PTT Oil and Retail Business Co (PTTOR), a wholly owned subsidiary of national oil and gas conglomerate PTT Plc, is expected to increase the share value of PTT by 1.6-3 baht per share and is slated to become this year's largest public offering, says LH Securities.
PTTOR's initial market capitalisation is estimated at 190-250 billion baht, which would meet the listing requirement on the SET50 index.
LH Securities forecasts the company's net profit to decrease by 10-15% to 9.3-9.5 billion baht this year because of the impact from Covid-19 outbreak, with the price-to-earnings ratio projected at 20-25%.
PTT president and chief executive Chansin Treenuchagron earlier said PTTOR will offer up to 2.7 billion newly issued ordinary shares, excluding any additional shares that could be offered for an over-allotment option.
PTTOR will also allocate up to 300 million newly issued ordinary shares exclusively to existing shareholders of PTT. Newly issued ordinary shares of PTTOR will dilute PTT's ownership to no less than 75%.
The long-delayed IPO has been in development since 2018, but the process of approval for asset separation from its mother firm was complicated and took a long time.
After the offering of newly issued ordinary shares of PTTOR, PTT will hold not less than 75% of the total issued and offered shares of PTTOR, and will remain the majority shareholder of PTTOR.
The Securities and Exchange Commission will asses the company's IPO filing document at around 165 days or within Sept 14, 2020.
PTTOR has registered capital of 8.78 billion baht. Main assets include subsidiaries in oil retail and non-oil units in Thailand and abroad, oil pipelines and jet fuel services, cooking gas, lubricant oil and some cooking gas depots.
International oil trading units and some cooking gas depots will still remain under PTT.
The company plans to use part of the money raised by the IPO to expand its oil retailer operations globally.
Its main business is oil retail and wholesale with 80% of net profits last year coming from oil, while 20% was from non-oil businesses.
PTTOR operates 1,894 oil pumps, 1,700 of which are in Thailand, with the remainder in Cambodia, Laos, Myanmar and the Philippines, as well as 2,750 Cafe Amazon outlets.
In January, PTTOR announced a plan to invest 77.4 billion baht over the next five years (2020-2024), mostly in new oil pumps and non-oil chain expansion.