PTT: One Restructuring Plan to Benefit All Business

The business restructuring plan of PTT to acquire a total of 44.45% stake in GPSC benefits all business lineup wihtin its wing.

Global Power Synergy Public Company Limited (GPSC) first listed in the Stock Exchange of Thailand in 2015 as the fifth spinoff of its parent company PTT Public Company Limited (PTT).

 

GPSC has made leaping progress in business operation by taking over Glow Energy Public Company Limited (GLOW) with an investment value of 93,000 million baht within a short period of time after the listing.

The reverse idiom of big fish eats small fish would fit GPSC well in this situation as it turns out GPSC, as a small fish, has eaten the bigger fish such as GLOW, resulting in a significant expansion in its size and value.

From a company with 20,000 million baht of revenue and 3,000 million baht of net profit, GPSC’s revenue jumps to 70,000 million baht after acquiring GLOW, while recording a net profit of 7,000 million baht.

 

In the middle of 2020, PTT made an internal restructure of GPSC’s shareholders by acquiring an additional 8.91% of GPSC’s shares from Thai Oil Public Company Limited (TOP) to top up its shareholding proportion to 31.72%.

Last week, PTT and its subsidiary, Siam Management Holding Company Limited (SMH), jointly acquired an addition of 12.73% shares in GPSC from PTT Global Chemical Public Company Limited (PTTGC) at a price of Bt70.00 per share for a total value of 25,126 million baht, resulting in PTT and SMH to hold a total of 44.45% stake in GPSC and PTTGC at 10%.

 

The move was a restructuring program in its electricity business within the organization to make the acquisition in GPSC more flexible through its flagship company unlike what it used to be when the major shareholders were scattered all around, including the holding in TOP and PTTGC.

 

The 44.54% stake in GPSC held by PTT would make it easier to administer and manage, while TOP and PTTGC can focus on their core business. TOP has a refining business in which the clean fuel project will require more effort. As for PTTGC, the company can focus more on the downstream petrochemical business. The 25,000 million baht from selling its stakes in GPSC could be used in more M&A deals for further growth.

 

Primarily, it has been speculated that PTTGC would record 8,600 million baht of net profit from selling GPSC due to its cost at Bt35.50 per share, which could make an extraordinary growth in 2Q21 earnings.

 

It can be said that the restructuring program benefits every business lineup under PTT’s management.

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