Today (December 9), at 14:00, attention is on the Extraordinary General Meeting of Shareholders of Thai Oil Public Company Limited (SET: TOP or Thai Oil). The meeting, held electronically (E-EGM), will include a key agenda item: the approval of the company’s asset monetization strategy. For this resolution to pass, it requires at least three-quarters of shareholders’ votes.
Previously, the board meeting on September 25, 2025, resolved to approve fundraising through the asset monetization project, which is one of the initiatives aimed at driving the organization forward. After completion of this transaction, TOP will receive net cash flow of approximately THB 18.23 billion.
The asset monetization project involves allowing PTT Tank to acquire a 49% stake in TOP Infra Co., Ltd., a subsidiary of Thai Oil that will invest in a 21-year long-term lease of infrastructure assets in Si Racha District, Chonburi Province, including crude oil storage tanks, Single Buoy Moorings (SBM), lorry loading stations, and some land plots. TOP will lease these assets back for continuous refinery operations. This transaction will strengthen Thai Oil’s financial position, while optimizing its capital structure and debt-to-equity ratio.
Capital Advantage Co., Ltd. (CapAd), acting as the independent financial advisor, expressed support for TOP regarding the asset monetization project. The company considered the fair value of the 21-year lease rights to be THB 37.04 billion, while the company will receive compensation of THB 37.40 billion, about THB 361.10 million or approximately 0.97% above the fair value. Therefore, CapAd deemed the compensation fair and beneficial to the company overall.
The asset management project by TOP consists of two transactions:
- Transaction 1: Long-term lease. TOP will lease a portion of its infrastructure assets to TOP Infra for a 21-year. Thai Oil will receive a one-time lease right compensation of THB 37.40 billion baht, to be paid in one lump sum by TOP Infra.
- Transaction 2: Leaseback of leased assets. TOP will lease back the assets from TOP Infra for its refinery and related businesses under a short-term lease agreement of 3 years, with the option for continued leaseback if Thai Oil so wishes. The leaseback payment for the initial 3-year lease totals THB 9.77 billion.
Krungsri Securities (KSS) has a positive outlook on TOP’s asset monetization, stating the company can use the cash of approximately THB 18 billion to repay debt. Although some financial costs may rise by about 3.5%, this is preferable to the risk of a credit rating downgrade, which would further increase borrowing costs.
The recommendation for TOP remains “Neutral,” with a target price of THB 32.00 per share (target price for 2026 is THB 37.25 per share). The advice is to continue holding shares and watch for potential upsides from lower-than-expected incremental costs from the Clean Fuel Project (CFP) and profit recovery in the second half of 2025-2026.
Trinity Securities considers this a rational transaction for TOP in the long term, to preserve its credit rating via asset monetization lease and leaseback. This will enable liquidity for debt reduction without impairing the company’s financial position. Maintaining an Investment Grade credit rating will also provide future financial flexibility, such as issuing perpetual bonds.
However, the impact on net profit is expected to result in a decrease of about THB 600 million per year, or around 4-5% from the estimation in 2026. The recommendation remains to “Hold” with a target price of THB 32.00.
