Thailand’s top power producer ‘B.Grimm Power’ is moving forward for a major restructure as the company is seeking potential partners to strengthen its business to achieve its goal of 10,000 MW production capacity.
Earlier this morning, Bloomberg reported, citing a source, that the company is considering selling a minority stake in its gas-fired power portfolio that could fetch $500 million to $1 billion from the transaction. The study is in an early stage and B.Grimm could still decide against any deal.
The report noted that the company is reaching out to other power companies in the region as well as private equity firms and infrastructure funds to gauge their interest.
Mr. Nopadej Karnasuta, Senior Executive Vice President – Investment, Innovation and Sustainability, and Thailand and Malaysia Region Business of B.Grimm Power Pcl. (SET: BGRIM), told ‘Kaohoon’ that the report was in line with the company growth projection to achieve its milestone of 10,000 MW production capacity. However, the selling of its stake is not meant to be seen as a move to raise cash or taking a step out of the business, but is meant to strengthen the business through partnership without the need to put burden on investors via capital increase.
Power producers are taking a heavy damage from the current situation that the Thai government is reducing electricity prices to lower the cost of living for Thais, which causes power producers, especially those with higher number of SPPs, notably BGRIM, to see smaller margins that was hit by higher gas costs since the invasion of Russia in Ukraine.
There are speculations in the market that the top prospect to acquire this asset from BGRIM, if the company decides to proceed in this route, could be an infrastructure fund as it is quite normal for the funds to seek assets that give stable returns and security.
BGRIM already has one infrastructure fund which is Amata B.Grimm Power Infrastructure Fund (ABPIF). The transfer of benefit for ABPIF is in accordance with the agreement to transfer revenue derived from the production of electricity entered into with Amata B.Grimm Power 1 Limited and Amata B.Grimm Power 2 Limited as a result of conducting the business of producing electricity and supplying it to the Electricity Generating Authority of Thailand (EGAT) and the electricity consumers in industrial estates.