The Energy Regulatory Commission (ERC) on Wednesday approved the takeover of Glow Energy Plc by Global Power Synergy Plc (GPSC), with the proviso that Glow must sell some of its power plant assets at Map Ta Phut to a third party before the acquisition takes place.
The new condition is aimed at preventing monopolies.
The seven ERC commissioners were unanimous in approving the takeover deal, expected to be worth 139 billion baht. This was the third judgement after the ERC blocked the deal in its first two rulings in October and December.
Earlier, the ERC said such a deal would breach the Energy Industry Act of 2007, which encouraged the regulator to liberalise the power business.
After that, GPSC submitted a Plan B to the ERC last Wednesday with the intention of purchasing Glow shares.
Secretary-general Narupat Amornkosit said the ERC came to a consensus and approved GPSC's acquisition of Glow based on the condition that Glow must sell Glow SSP 1 ahead of the acquisition or at the same time as the transaction.
Glow must clarify the contract terms to its power buyers affected by the deal to ensure fairness, transparency and good governance.
Glow SPP 1 is a co-generation plant at Hemaraj Eastern Industrial Estate in Map Ta Phut, Rayong. It has 124 megawatts for power, 90 tonnes per hour for steam and 190 cubic metres per hour for demineralised water.
The plant provides 110MW of electricity to the state-run Electricity Generating Authority of Thailand under the small power producer (SPP) programme. The remaining power is supplied to industrial customers in the industrial estate through an underground distribution network.
"Earlier, Glow itself submitted its intention to merge with GPSC," Ms Narupat said. "The new proposal is clearer and solves the monopoly issue in Map Ta Phut."
The ERC ordered Glow to add 11 conditions as notes of reference in Glow's power-generating licences granted by the ERC. The other power plants in Rayong -- Glow SPP 11, Glow SPP 2 and Glow SPP 3 -- will be included to comply with 10 additional conditions to ensure fairness to all parties.
"All conditions will be evaluated and revised by the new working committee that is appointed by the ERC, as it aims to ensure fairness for every stakeholder in this takeover deal," Ms Narupat said.
The first condition is to let Glow's existing customers, mainly in Padaeng Industrial Estate, Rayong, change their power purchase agreements to other providers, while Glow as the power licence holder must connect the underground distribution network to other providers and pay for any additional services.
Meanwhile, both SET-listed companies, Glow and GPSC, must avoid any conflicts of interest during the acquisition period. More importantly, they are barred from appointing executives or staff from any petrochemical company during the transition.
Many power buyers in Rayong are petrochemical producers, while GPSC itself is 22.7%-owned by PTT Global Chemical Plc (PTTGC), Thailand's largest petrochemical producer.
In addition, the ERC has ordered both Glow and GPSC not to use discriminatory practices with their power buyers, and they must strictly follow all rules and regulations with regard to power purchase agreements.
Their existing power buyers will have the right to renew and extend their agreements, and both Glow and GPSC must prioritise those buyers for at least three years before the agreements expire.
Each power purchase agreement must be extended by a further three years, and both companies must offer fair prices on power tariffs and provide sufficient electricity and standardised services.
Executives of Glow and GPSC could not be reached for comment after the ERC handed down its final decision.
GPSC is the power business arm of PTT Group. It agreed in June to purchase 69.11% of Glow from French-based Engie, with the remaining 30.89% to be bought through a tender offer.
The 139-billion-baht deal was viewed as the largest in terms of value in 2018.
Under the plan, GPSC was to own 80% of private power purchase agreements in the Map Ta Phut area.