Thai power plant valued at $1.5 billion

The 3,200 Mw Ratchaburi gas-fired electric generation station has been appraised at about $1.5 billion (56.179 billion baht) in preparation for its sale to Ratchaburi Electricity Generating Holding Co. by Electricity Generating of Thailand. About 40% of the company's share will be sold in an initial public offering in October; the shares will be listed on the Stock Exchange of Thailand.


BANGKOK�The 3,200 Mw Ratchaburi gas-fired electric generation station has been appraised at about $1.5 billion (56.179 billion baht) in preparation for its sale to Ratchaburi Electricity Generating Holding Co. (REGH) by Electricity Generating of Thailand (EGAT).

Currently a unit of EGAT, REGH will be partially privatized later this year. About 40% of the company's share will be sold in an initial public offering in October and the firm's shares listed on the Stock Exchange of Thailand.

EGAT will keep a 45% stake in REGH, and a 15% share will be provided to EGAT employees and their pension fund at a par value of 10 baht/share.

REGH will borrow about 42 billion baht to purchase the plant. Officials said banks are lining up to provide the financing for the company.

The sale price was derived by averaging the valuations by American Appraisal Associates Inc. and Brooke International (India) Ltd., officials said. The two are among four international appraisal advisers commissioned for the task.

American Appraisal valued the plant at 57.204 billion baht and Brooke International, 56.234 billion baht. The other two�Jones Lang LaSalle IP Inc. and Arthur Andersen LLP�appraised the power plant at 61.050 billion baht and 55.320 billion baht, respectively.

Piyasvasti Amranand, chairman of the plant privatization committee, said the chosen valuation price is 3.12% higher than Ratchaburi's 55.0 billion baht book value. He said the valuation is part of the process of partial privatization of the power plant which is fueled by natural gas piped from Myanmar's Gulf of Martaban.

With an ultimate generating capacity of 3,200 Mw, the Ratchaburi plant, 130 km southwest of Bangkok, is being built in stages. Although the Petroleum Authority of Thailand (PTT) is committed to purchasing 525 MMcfd of Yadana gas to feed the plant, the generating station is consuming only about 150 MMcfd of gas as a result of repeated construction delays. As a result, a feud has developed between PTT and EGAT over the substantial costs incurred as a result of PTT's failure to meet commitments under its take-or-pay gas contract (OGJ Online, May 2, 2000).

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