SET-listed B.Grimm Power Plc, the power-generation arm of the B.Grimm conglomerate, is in talks with several operators on possible mergers and acquisitions (M&A) to gain capacity in the coming years.
Executive vice-president and chief financial officer Nopadej Karnasuta said B.Grimm is in talks with five operators, each with power plants in the range of 100-500 megawatts capacity.
Most are involved in combined-cycle generation and renewable power in Asean and domestically.
Mr Nopadej said three deals are expected to be finalised by year-end.
M&A deals are an additional project to help increase B.Grimm's power generating capacity apart from its own green field development, which is expected to get financial support from the Asian Development Bank (ADB) and local banks, he said.
ADB has provided credit facilities for a concessional loan facility of US$20 million (666 million baht) and the indicative term sheet of $235 million, while Thai commercial banks will provide almost 2 billion baht in loans.
Mr Nopadej said B.Grimm is planning to cut the average financial cost of operation and capital expenditures by issuing another tranche of debentures.
The company plans to issue debentures of 3-5 billion baht within this year in a bid to refinance debts.
The debentures would offer coupon rates slightly below the company's long term debt and are expected financial average costs will be trimmed down to 4.5% by the end of this year and to 4% by early next year from 5.5%.
Early this year, B.Grimm issued a project debenture of 11.5 billion baht with an average coupon rate of 3.8%.
"The Thai bond market has high potential, making it attractive to investors," Mr Nopadej said.
President Preeyanart Soontornwata said the company recorded a total revenue of 15.61 billion baht in the first half of this year (January-June), an increase of 15% from the previous year.
Net profit in the first half was at 1.48 billion baht, a 12% increase.
Additional power generating capacity from new power plants contributed the largest proportion of revenue, which included Amata B.Grimm Power 5 in Amata Nakorn Industrial Estate and B.Grimm Power (WHA) 1 in Hemaraj Industrial Estate.
"Earnings in the first half of this year outpaced our expectations," Ms Preeyanart said. "The rise in revenue and profit are due largely to effective cost management and cost-cutting programmes."
Apart from M&A plants, B.Grimm is also conducting a feasibility study on green field development for another 2,500MW, ranging from fossil fuel to renewable power at home and across Asean.
Ms Preeyanart said B.Grimm has committed 55 billion baht during 2017-22 in order to increase capacity to 2,431MW from a combined 44 power plants within 2022, up from 1,646MW from 30 power plants.
BGRIM shares closed yesterday on the Stock Exchange of Thailand at 17.60 baht, up 20 satang, in trade worth 124.3 million baht.