B.Grimm, one of Thailand's oldest conglomerates, has acquired the power business of Malaysia's Sime Darby in Thailand for 5.3 billion baht and plans to seek more opportunities in Asean.
B.Grimm chairman Harald Link says the two plants acquired from Malaysia's Sime Darby provide synergy with the Thai company's existing capacity.
Under a sales and purchase agreement signed yesterday, B.Grimm Power acquired two power plants with a combined generating capacity of 163 megawatts and 70 tonnes per hour of steam from Sime Darby Energy Pte, a wholly owned unit of the Malaysian conglomerate.
The acquisition supports B.Grimm Power's ambitious goal to boost its capacity to 5,000 MW by 2019 including installed capacity of 2,000 MW.
With the buy, the small power producer (SPP) has upgraded its 2014 revenue projection by 4.2 billion baht to 23.2 billion, out of a group total of 34 billion.
The acquisition, advised by CIMB Thai Bank, aligns well with B.Grimm Power's strategy of expanding its SPP co-generation business, with Sime Darby's assets complementing existing plants, said B.Grimm chairman Harald Link.
B.Grimm Power now operates six gas-fired, combined-cycle co-generation power plants with a combined capacity of 733 MW, with four more under construction for 480 MW. Six more projects are scheduled to begin construction from 2014 onwards.
Sime Darby, meanwhile, is exiting the power generation business after 12 years in Thailand. With the transaction, Sime Darby's remaining businesses include plantations, property, motor distribution and utilities in more than 20 countries.
Jauhari Hamidi, executive vice-president for Sime Darby's energy and utilities outside of China, said the divestment of the two power plants is in line with the company's consolidation and refocusing on core businesses. Five months ago, the group sold its power business in Kuala Lumpur.
"We plan to use the proceeds from this transaction to strengthen our existing operations," Mr Jauhari said.
"And Sime Darby remains committed to other existing business in Thailand."
Alan Hamzah, Sime Darby's executive vice-president for group strategy and business development, said the group's Thai portfolio included Morakot Industries, Mecomb's electric component business and distribution of Ford, Mazda and BMW cars.
The group is interested in expanding to palm oil plantations in Thailand and broadening its car distribution business here. Other opportunities include renewable energy and equipment trading, possibly through partnerships with B.Grimm.
Mr Link said B.Grimm and Sime Darby could eventually join hands in automobile and trading businesses in countries such as Malaysia, where opportunities abound.
B.Grimm, meanwhile, is on the shortlist for Myingyan's gas-based 220-MW power plant in Mandalay, Myanmar. It is also in talks with Japan's Sumitomo Group to develop a 40-MW power plant possibly fuelled by clean coal in the Thilawa Special Economic Zone (SEZ) near Yangon.
Sumitomo, a shareholder of Amata B.Grimm Power, is a member of the Japanese consortium for Thilawa SEZ development.
Mr Link said B.Grimm Power would require US$3 billion to add 3,000 MW within five years and plans an SET listing within two years to raise capital.