By an OGJ correspondent
BANGKOK, Dec. 19 -- A top Thai court has ruled against a Thai consumer group's petition to nullify the 2001 partial privatization of the former Petroleum Authority of Thailand (PTT), now PTT PLC.
However, the Supreme Administrative Court also ordered PTT to cede back to the state its 3,000-km of natural gas pipelines and the land appropriated to build it, which are valued at about 100 billion baht ($2.94 billion).
The verdict only saved the Thai state-controlled energy giant from delisting from the Thai stock market, which prevented a blow to the country's economy.
The court on Dec. 14 ruled that, although the privatization of PTT was lawful, PTT had no right to transfer its (state-owned) assets to a privatized entity and would need to return them to the state.
Had the court ruled against PTT, which accounts for 15% of total capitalization on the Stock Exchange of Thailand, it would have been forced to remove the listing of its stock shares from the Thai capital market.
PTT has a market capitalization of about 800 billion baht. The court recognized that forced delisting from the Thai stock market would jeopardize the country's financial and social state, and even its security.
Analysts said the transfer of PTT's pipeline assets could have a negative impact on the firm and the broader stock market, depending on how it is handled.
But PTT MDNM Pres. Prasert Bunsumpun sought to downplay the impact, saying the pipeline assets represent just over 10% of PTT's combined group assets and generated around 20 billion baht/year in revenue for PTT, a small portion of the estimated 1.4 trillion baht in revenues projected by the energy conglomerate this year.
Furthermore, Prasert said, PTT is expected to be compensated for the transfer and to remain operator of the pipelines.
PTT's 2001 initial public offering was marred by complaints about the allocation of shares to those with strong political connections to the administration of Thaksin Shinawatra, the ousted former prime minister.
Thai consumer groups filed a legal challenge in August 2006 after successfully derailing the partial privatization of the Electricity Generating Authority of Thailand, the state power utility, in March 2006 on legal grounds similar to those filed against PTT.
