Mr. Bandhit Thamprajamchit, Chief Executive Officer and President of Thai Oil Public Company Limited (SET: TOP or Thai Oil), stated that at the Extraordinary General Meeting of Shareholders held on December 9, a vote of 99.98% approved the Asset Monetization Project, which involves the optimal management of certain infrastructure assets of the company located in Si Racha District, Chonburi Province. This includes the long-term leasing of assets to a new subsidiary, TOP Infra Co., Ltd., and the subsequent sublease of these assets back to the company under a short-term lease agreement.
TOP Infra, which will be held by a new subsidiary of PTT Tank Terminal Co., Ltd. (PTT Tank) and Thai Oil in a shareholding ratio of 49% and 51% respectively, will undertake the long-term lease from TOP for 21 years and sublease the assets back for operational use. The Asset Monetization Project will provide Thai Oil with net cash flow of approximately THB 18.23 billion.
The shareholders also approved Thai Oil to enter a short-term sublease agreement for the assets from TOP Infra for the operation of its oil refinery and related businesses over a period of three years, totaling THB 9.77 billion, or until the end of December 2028, with the right to renew up to the full 21-year lease term. The company plans to complete all procedures by this month.
For the long-term lease transaction, TOP will lease certain infrastructure assets as follows: (1) Seven crude oil tanks, including associated structures and buildings, (2) Single Buoy Moorings (SBM) and related instruments and equipment, including the mooring system and parts of SBM No. 1 and SBM No. 2 (excluding the subsea pipelines), (3) Lorry Loading Stations including 18 fuel loading stations and 21 product storage tanks, and (4) 31 land plots totaling 145 rai, 3 ngan, and 51.9 square wah.
Upon completion of the transaction, TOP’s net debt ratio is expected to decrease from 5.8 times to 4.8 times, and it is anticipated that this figure will drop below 5 times, which is set as the long-term target after the Clean Fuel Project (CFP) completion.
Meanwhile, Capital Advantage Co., Ltd. (CapAd), acting as the independent financial advisor, commented on the reasonableness, stating that TOP’s Asset Monetization Project will increase financial liquidity without additional debt, especially given the currently high net debt levels when compared with operating cash flow (Net Debt / EBITDA Ratio). This will help maintain financial discipline and credit rating.
Mr. Bandhit further added that the Asset Monetization Project aligns with TOP’s new strategy, “2S1P”, comprising S1: Strengthening the Core, P: Powering the Platform, and S2: Sustaining the Future, focusing on future business groups, expanding into new businesses, reducing oil refining volatility, and supporting the energy transition.
The operation is divided into two phases: the first phase during the initial five years (2025–2029), “Empowering Strength”, aims to ensure completion of the CFP project within the timeline and budget to maintain the company’s stability and credit rating; the second phase (2030–2034), “Powering Growth”, prepares the company for investment in high-margin, environmentally friendly businesses once the CFP project is fully operational.
According to the Investment Analysts Association (IAA Consensus), the target price for TOP stock in 2025 is expected to be THB 38.36 per share, with a high of THB 44, reflecting analysts’ positive outlook and indicating further upside potential from the current share price.
