BRR to dilute its shares in Ratch-Lao
SET-listed Buriram Sugar (BRR) is diluting its shares from 65% to 45% in Siphandone Ratch-Lao Co, the developer of a wood pellet fuel production plant for biomass-fired power generation, in a bid to strengthen its fuel business in Laos.
BRR holds shares in Siphandone Ratch-Lao Co through its subsidiary Buriram Green Energy Co.
The dilution will allow Japan-based Kyuden Mirai Energy Co (KME) to purchase a 20% share to secure a long-term fuel purchase agreement.
KME plans to sign a long-term purchase agreement with Siphandone Ratch-Lao Co to export and provide fuel to its power plants.
BRR chief executive Anant Tangtongwechakit said the share purchase deal, worth 2.24 million baht, is expected to be completed by the middle of this year.
"This deal will enhance the strength of our business in wood pellet fuels and help us earn extra benefits," said Mr Anant.
Siphandone Ratch-Lao Co was jointly established in September last year by Ratch Group's wholly-owned subsidiary Ratch-Lao Service Co in Laos, Buriram Green Energy Co and Siphandone Bolaven Development Co, with total registered capital of 1.7 million baht.
Once share restructuring is completed, BRR will hold a 45% stake in Siphandone Ratch-Lao Co, with 25% held by Ratch Group, 20% by KME and 10% by Siphandone Bolaven Development Co.
The wood pellet production plant is under construction and scheduled to begin operations by the middle of next year.
The facility is designed to have an annual total capacity of 100,000 tonnes.
However, the capacity can be doubled to 200,000 tonnes in the future as its raw materials are fast-growing trees planted on an area covering 20,000 rai, or 3,200 hectares.
Last week BRR reported a six-fold increase in net profit to 186 million baht in the first quarter this year, up from 30.4 million from the same period last year.
The gain was attributed to quota selling as well as interest generated from a farmer debt scheme.