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BANGKOK, Jan 12 (Reuters) – ExxonMobil (XOM.N) has agreed to promote its two-thirds stake in Esso Thailand (ESSO.BK) to Thai power agency Bangchak Company (BCP.BK), the businesses stated, in a deal valued at about 20.1 billion baht ($603 million).
Bangchak shares closed up 9% whereas Esso Thailand, which closed at 11.2 baht on Wednesday, fell 17% after the businesses made the announcement in separate statements.
ExxonMobil’s shares traded up about 1%.
“The ultimate value shall be based mostly on Esso Thailand’s newest quarterly earnings after situations are finalised,” Bangchak chief govt Chaiwat Kovavisarach instructed a information convention.
Bangchak stated in a press release it might purchase Esso Thailand shares at an indicative value of 8.84 baht per share, placing the agency’s enterprise worth – which additionally contains debt and money – at 55.5 billion baht based mostly on its third quarter earnings.
“There shall be synergy and price financial savings of between 1.5 billion baht to 2 billion baht per 12 months,” Banchak CEO stated.
The sale contains the Sriracha oil refinery, choose distribution terminals and a community of Esso-branded retail gas stations, which is able to later be re-branded to Bangchak.
ExxonMobil stated it might “proceed to provide the Thailand market with branded completed lubricants and chemical merchandise by way of a brand new firm to be fashioned”, whereas it focuses its funding on international manufacturing amenities.
Bangchak stated it might initially purchase ExxonMobil’s 65.99% stake after which launch a young provide for remaining shares, held primarily by institutional funds on the similar value.
The transaction is anticipated to shut within the second half of 2023, topic to regulatory approvals.
The deal shall be funded by money available and financial institution loans, Bangchak stated, noting it might add refining capability of 174,000 barrels per day and 700 service stations.
“Debt-to-equity ratio to not exceed two instances after the deal,” Bangchak vice chairman for finance, Phatpuree Chinkulkitnivat stated.
($1 = 33.3500 baht)
Reporting by Ashitha Shivaprasad in Bengaluru and Chayut Setboonsarng ; Enhancing by Christian Schmollinger, Kenneth Maxwell and Tomasz Janowski
Our Requirements: The Thomson Reuters Belief Ideas.
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