BUSINESS SEPARATION
PTT break-up plan takes shape
The Boston Consulting Group (BCG), which is acting as financial adviser for PTT Plc's business-separation plan, expects tactics for splitting up the
giant corporation to be completed next month.
PTT president Prasert Bunsumpun said it was likely both the natural-gas and oil businesses - domestically and internationally - would be separated from the firm and established in a company format. BCG has assisted with the study of which businesses should be separated to establish the new firms. Prasert said the study included the nature of the cross-shareholding between PTT and its subsidiaries, both directly and indirectly, and whether PTT should raise or reduce its interests in the companies, to give them independence of management and to make them more attractive to investors. Prasert said that in the future, PTT would be only a holding company controlling business direction and policy. The natural-gas transmission business will be the first to split from the parent firm and form a new company, with the natural-gas separation and oil businesses expected to follow. "Separating PTT's businesses will demonstrate transparency of management and accounting to the public," he said. "The public will know which companies post losses or profits." He said the public perception was that PTT's profits come from its natural-gas and oil businesses, but in fact they came from many businesses. Last year, PTT recorded a net profit of Bt85.52 billion. Of that, Bt15.12 billion came from PTT Exploration and Production Plc; Bt12 billion from oil refineries; Bt5.99 billion from its petrochemical business; and Bt9.79 billion from natural-gas transmission. About Bt4.62 billion came from natural-gas distribution; Bt13.68 billion from natural-gas separation; Bt2.84 billion from international oil trading; and Bt1.61 billion from domestic oil distribution. Prasert said the business separation would give PTT a clearer picture of future investments. The group expects to spend Bt595.47 billion on investments between now and 2010. Of that, Bt150.84 billion will be spent on the petrochemical business, Bt225.64 billion for natural gas, Bt153.55 billion for PTTEP investments, Bt38.87 billion for oil refineries, Bt13.92 billion for oil trading and Bt12.65 billion for other investments.
Watcharapong Thongrung The Nation
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