BGRIM's subordinated perpetual debentures, complied with the TAS 32, to be offered during 19-21 Nov.
21 OCT 2019: Thailand’s leading private power producer, B.Grimm Power PCL (“BGRIM”), is confident that its upcoming subordinated perpetual debentures (“Perps”), to be offered during 19-21 November, will be well-received by the public.
The company also confirms that the perps will not have any problem with the TAS 32 accounting standard coming into effect next year as they already comply with the new standard to qualify as equity. The perps, which proceeds will be used to fuel the company’s expansion of domestic and international power plant portfolio, will pay a fixed coupon of 5.00% per annum in the first five years. The company believes that investors will find the perps attractive given BGRIM’s proven performance, bright business prospects, and robust capital structure.
Ms. Preeyanart Soontornwata, President of BGRIM, expressed her confidence that BGRIM’s perps, to be offered in the total amount of up to THB 8 billion will be warmly welcomed by both retail and institutional investors. She cited positive factors including BBB+ for issue rating and A/stable for company rating by TRIS which are investment grade, a fixed coupon rate of 5.00% per annum for the first five years, the company’s long-term contracts with public-sector entities, stable revenue flows from the contracts as well as the potential growths from domestic and overseas demand for power consumption.
On the recent concern about the forthcoming adoption of the new TAS 32 accounting standard, she clarified that BGRIM had been aware of the impact of TAS 32 for quite some time and that the company had already consulted with its auditor before coming with this perp issuance. Therefore, the investors can rest assured that BGRIM perps, to be offered during this 19-21 November, will not have any problem complying with the accounting criteria to qualify as equity in accordance with the new standard.
“Electricity is crucial for everyone, everywhere, now and certainly also in the future. So there are always lots of potentials and opportunities in this business.” said the President. “It is also widely accepted that the business can generate highly stable cash flow due to the long-term power purchasing agreement with power-related government enterprises, such as EGAT MEA and PEA, and with private industrial users. That is correct, but only if the company doing the business possesses extensive experience and expertise in developing and operating the plants efficiently. Clearly, BGRIM has proven that with our performance, track record, and trust received from both public and private sectors. BGRIM has also extended our expertise to cover various types of power plants as well, so we are now ready for any incoming opportunities and future trend. This is why we would like to issue the perps, to be most prepared for these opportunities.”
BGRIM is one of the main businesses of B.Grimm Group which has maintained its presence in Thailand for more than 140 years and has pioneered several infrastructure projects in the country. BGRIM was also among the first private power producers in the country. After more than two decades in the power production business, BGRIM now has a combined production capacity of 3,245MW (from 56 plants, including those already in operation and those currently under construction and development, about 75% of which are based in Thailand and the rest are abroad). It aims to raise the capacity to 5,000MW by 2022.
As of 30 June 2019, the financial cost of the company had been reduced to 4.5% as a result of proper management of its financial structure, with a net debt-to-equity ratio of 1.6x, as shown on its consolidated financial statements. More than 70% of the net debt is attributable to its projects and the subsidiary companies that it holds the majority shares and the management control, hence the need to reflect the assets and liabilities of those projects and companies in the consolidated statements. The project-related debts are created using project finance arrangements with limited recourse. According to separate financial statements, its net debt-to-equity ratio as of the same date stood at 0.9.
For more information, investors may download the draft prospectus from SEC website (www.sec.or.th) or contact the branches of Joint Lead Arrangers;
- Bangkok Bank (except micro branches) Tel. 1333,
- KASIKORNBANK Tel. 02-888-8888#819,
- Krung Thai Bank Tel. 02-111-1111,
- Siam Commercial Bank Tel. 02-777-6784,
- Phatra Securities 02-305-9307 and
- Asia Plus Securities Tel. 02-680-4004.