TOP issues $1bn in debentures
Thai Oil Plc (TOP) has issued US$1 billion in debentures or senior unsecured notes to foreign institutional investors in a bid to maintain cash on hand and continue development projects in the pipeline during the economic downturn.
The company reported the move to the Stock Exchange of Thailand, raising the funds through its wholly owned subsidiary, Thaioil Treasury Center Co (TTC), fully guaranteed by the company.
Chief executive and president Wirat Uanarumit said the unsecured notes comprise $400 million and $600 million, carrying coupon rates of 2.5% and 3.75% interest, respectively.
These debentures have been rated BBB+ by Standard and Poor's and Baa2 by Moody's. The date to settle when the company will sell the debentures will be decided this month.
He said the proceeds from the issuance will be used for capital expenditure and general corporate purposes.
Mr Wirat said the debenture is part of its $4.69 billion budget from this year to 2024. Of the total, $3.48 billion is intended for capital expenditure and the remaining $1.2 billion for refinancing debt.
For this year the spending budget plan was set at $1.82 billion.
He said TOP's biggest capital expenditure is its Clean Fuel Project (CFP), which will enlarge its oil refinery capacity to 400,000 barrels per day (BPD) from 275,000 BPD. Construction started recently and is 39% complete, with operation expected in 2023.
Mr Wirat said CFP is valuable to TOP because it will expand capacity by 40% of production cost and oil refinery processes will be more flexible to buy several crude oil resources.
He said the high fluctuation of global oil prices made the company lose 10 billion baht in the first quarter this year, attributed to oil inventory loss. Oil inventory dropped from $65 per barrel in early January to $30 in late March.