ASEAN KEY DESTINATIONS
PTT reaches out to retail bond investors
The national energy flagship's strategy includes raising funds directly from retail investors. To build a loyalty base for future fundraising, the company next month will stage its first rights offering for existing bondholders.
The issue worth 10 billion baht will have two tranches: a four-year bond with a fixed interest rate, and a seven-year bond with a progressive rate.
"This is our first rights offering since our first issue in 2003. The coupon rate will include a spread, for example 25 basis points over the market rate which is around 3 percent at the moment, as we want to reward bondholders who have supported the company," said Penchun Jarikasem, executive vice-president for corporate finance.
PTT has almost 30,000 bondholders with minimum investments of 100,000 baht or more. Expanding the retail bondholder base is a good way to diversify funding sources, she said.
The country's largest company by capitalisation has a five-year investment plan worth 240 billion baht, and bank loans are capped by a single lending limit. As well, funding from institutional investors such as asset management or insurance firms is capped at a percentage of their net asset value or equity.
PTT listed on the Stock Exchange of Thailand in 2001 and issued its first domestic bonds in 2003, followed by a dollar-denominated bond a year later.
The PTT group today has consolidated assets of 1.1 trillion baht, with nine subsidiaries listed on the stock market, that accounts for 24-30 percent of total SET capitalisation depending on oil prices.
PTT alone has outstanding debt of 260 billion baht, 30 percent of it in foreign currencies and the rest in baht. Its baht debt includes about 20 billion baht in commercial bank loans and 160 billion in bonds.
PTT last year ranked 118th in the Fortune 500 with revenue of US$59.9 billion. It estimates it will need to reach $140 billion in revenue to break into the top 100.
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