Ratchaburi Electricity Generating Holding Company of Thailand has declared it is considering raising funds for its subsidiary company, Ratchaburi Electricity Generating Company, through the debt capital markets. The company announced its intention by way of a formal letter to the Stock Exchange of Thailand.
For the deal to go ahead, approval must be given by the shareholders in the subsidiary company, to be decided at an extraordinary general meeting on 2 July.
On the condition that shareholders give the plan the thumbs up, the company will look to raise as much as Bt44 billion ($972 million) with a tenure of no longer than ten years. It has not yet been determined whether the money will be raised through single or multiple issues, or whether the debt will be unsubordinated, secured or unsecured.
Ratchaburi was established in March last year as part of the government's privatization scheme -- required by the International Monetary Fund -- in return for assistance given during the Asian economic crisis.
The state-owned Electricity Generating Authority of Thailand (EGAT) sold a 40% share in the Ratchaburi power plant, which provides 14% of the nation's electricity, in October. The initial public offering raised $480 million.
Ratchaburi Electricity Generating Holding completed the first phase of its acquisition of the plant, whose capacity will be boosted from 2,920 megawatts to 3,645 by megawatts in April 2002, by raising Bt44.1 billion through loans last August.
Eight banks were syndicated on the deal — ABN Amro, Bangkok Bank, Bank of Ayudhaya, Bank Thai, Citibank, Krungthai Bank, Siam Commercial Bank and Thai Military Bank.
The proposed bond offering will be used to re-finance the existing debt, as Boonchoo Direcksathapon, managing director of the holding company explains. "When we started the project by raising money through loans, we said that if the opportunity arose, we would go to the capital markets to try and refinance the debt," he says. "At the moment, we cannot say when the deal will take place, or confirm the amount. We have to get the green light from the subsidiary board."
Direcksathapon confirmed that the company was in discussions with a number of banks, but would not disclose which ones at this point.
