The Board of Directors of PTT Exploration and Production Public Company Limited on July 20, unanimously approved the issuance and allocation of up to 650 million new ordinary shares.
The objectives of the fund raising are to support the Company’s plan to expand its investments worldwide in order to secure new reserves of oil and natural gas to meet Thailand’s increasing demand for energy and to increase the Company’s competitiveness in the global arena.
Mr. Tevin Vongvanich, President and Chief Executive Officer of PTTEP, said that the Board of Directors has approved the plan to allocate up to 650,000,000 new ordinary shares for the proposed Offering. The final offering price will be determined by book building, a price discovery process in which demand indications are collected from institutional investors both domestic and international.
The new ordinary shares will be allocated and offered to various groups of investors, including PTT Public Company Limited, the largest shareholder of PTTEP holding approximately 65.29 percent of the Company’s total issued shares, at the amount that will enable PTT to maintain its shareholding at approximately 65.29 percent of the total issued shares after the proposed Offering (before the exercise of greenshoe option); the general public, which may include existing shareholders and/or retail investors in Thailand; and the Overallotment Agent for the purpose of share price stabilization.
Details related to the proposed Offering, including the number of total shares offered, the number of shares offered to existing shareholders and retail investors, the offering period, the final offering price (which shall be the same for all groups of investors) and subscription details will be determined and publicly announced at later dates.
Mr. Vongvanich added, “After our careful considerations of the company’s financial plan that would enable us to pursue a rapid growth to achieve a production capacity of 900,000 barrels per day by the year 2020, we have concluded that in order to further strengthen PTTEP’s financial structure, it is necessary to raise approximately THB 98 billion to support our exploration, development and production efforts. At the same time, we will expand our footprint in different regions worldwide to secure additional oil and natural gas reserves to meet the increasing energy demand in Thailand.”
“The final offering price will be based on the prevailing market price of PTTEP shares on the Stock Exchange of Thailand at the time of the offering. The price will be determined using book building method, which is a price discovery process that collects local and foreign institutional investors’ demand for PTTEP’s shares within a price range. This is a transparent method widely used for offerings both locally and internationally. In determining the total number of shares to be offered, the Company will take into consideration both the amount of funds required and the final offering price. As a result, the total number of shares offered may not be the full 650 million shares depending on the final offering price but will amount to a total proceed of approximately Baht 98,000 million to the company,” said Mr. Vongvanich.
“Through this offering, we seek to optimize our capital structure and increase our financial flexibility for future expansion and investment. We seek to strengthen our long-term competitiveness to achieve our goal of becoming the leading Asian E&P company with emphasis on creating value for shareholders and pursuing sustainable growth under operational excellence, accretive investments, and agility to adapt to changes.”
“Based on PTTEP’s plan to continuously grow our production within the next 2-3 years, the proposed Offering comes at an opportune time, as we will be able to maintain short term return for our shareholders, and enhance our long term growth prospect,” added Mr. Vongvanich.
The capital increase and the proposed Offering are subject to approval by the Company’s extraordinary shareholders’ meeting scheduled for August 24, 2012.
LNG World News Staff, July 23, 2012