A formal RFP (request for proposals) was sent out two weeks ago and after bidding last Monday, a group of six banks were appointed on Friday to lead PTT to market. Merrill Lynch Phatra will be global co-ordinator of the forthcoming IPO, which also numbers Tisco and SCB Securities as domestic lead managers and Credit Suisse First Boston, Lehman Brothers and Merrill Lynch as international lead managers.
Losing bidders comprise Goldman Sachs, Morgan Stanley and Salomon Smith Barney.
The international syndicate line-up is broadly similar to the $231 million IPO of subsidiary PTT Exploration & Production's in June 1998 under the aegis of CSFB, Goldman Sachs and Lehman. Listed at Bt300 per share, the stock is currently trading at a Bt124 level, although it is up 24% year-to-date, outperforming the SET Index, also up 16.76%.
During 2000, the Thai equities market ranked fourth in the list of the world's worst performing, down 53% by year-end. The government is consequently taking a realistic view of how much it can raise, scaling back expectations for up to Bt90 billion ($1.97 billion) back in 1998 to Bt30 billion ($657 million) in 2001.
The government is said to be hopeful of getting the deal completed by early December and will offer a 25% to 30% stake, with a strong retail bias.
PTT has three main businesses – gas, oil (refining) and its international operations. One of its major projects is the Bt30 billion construction of a third natural gas pipeline linking the country’s eastern and western pipelines.
The government has said that this will be its last major investment ahead of industry de-regulation. Currently, PTT is the country’s only gas and oil supplier and a number of local experts have argued that it should not be privatized ahead of deregulation.
In FY00, the company recorded net income of Bt13 billion ($298 million), up from Bt6.31 billion the previous year. Sales also rose 60% to Bt364 billion.