PTT Plc's assets will be slashed by more than Bt100 billion if the Supreme Administra-tive Court opts to revoke the company's ownership of three gas pipelines. This in turn will lead to stock analysts revaluing the firm's assets.

"If PTT has to eventually return the pipelines to the government and then has to rent them, that would directly hit the company's profits. It may be necessary to readjust the company's revenue target as well as the company's book value," said an analyst from a local brokerage house.

SCB Securities estimated PTT's book value as of June 30 at Bt111 per share.

Since consumer groups filed a petition with the court, asking it to annul two decrees that supported the privatisation of the then Petroleum Authority of Thailand, there have been fears that if the court rules in favour of the petitioners, PTT could be delisted from the Stock Exchange.

Still, due to the immense impact of such a delisting, which would prompt the government to buy back all the free-float shares in the company - estimated at about Bt200 billion - and take Bt600

billion off the exchange's market capitalisation, it is thought the court may opt for a compromise ruling.

Given that the consumer groups are extremely concerned about PTT's ownership of the pipelines, which are built on expropriated land, an annulment of the decree would please the petitioners, analysts said.

Meanwhile, if PTT could return the pipelines to the government and rent them instead, that would minimise damage to the government, investors and PTT itself.

PTT's natural-gas pipeline network now has a combined length of 2,652 kilometres, with full capacity to transmit 3,170 million cubic feet per day. While the first and second pipelines were a Bt38-billion investment when PTT was still a state enterprise, the third will start commercially in the final quarter of this year.

Construction of the third pipeline, requiring an investment of US$2.3 billion (about Bt93 billion), started in 2002 - a year after the privatisation - and should be complete in 2010.

Analysts from DBS Vickers Securities and SCB Securities believe there is only a small chance that PTT will be delisted.

The DBS Vickers analyst said delisting would require a huge amount of money. As of March 20, the Finance Ministry holds a 52.47-per-cent stake in PTT, which has issued 2.8 billion shares. If it has to tender for the remaining 47.53 per cent or 1,333 million shares at the market price of Bt238, the ministry would need to spend a total of Bt317 billion, which represents 22 per cent of the national budget.

"If the ministry does not need to tender for the 15.58-per-cent stake held by its Vayupak Fund, it would need Bt213 billion - 15 per cent of the national budget - to tender for 31.95 per cent, or 896.1 million shares," the analyst said.

SCB Securities said in a research paper that aside from the huge sum, the delisting would lower the exchange's market capitalisation by 12 per cent and affect investor confidence in the status of state enterprises and partially privatised state enterprises.

Stock analysts acknowledge that this is a very delicate issue, and that the outcome is unpredictable. They believe that until the court comes out with its ruling, PTT's shares will be subject to selling pressure.

In the past two weeks - since September 6 when the court agreed to hear the case -PTT's share price has fallen from Bt238 to Bt216, a drop of 9.24 per cent. On the first three days following the court's announcement, it lost 10.91 per cent.

"Although the price has recovered slightly, investors need to closely monitor the situation as the shares will remain under pressure from the court proceedings," said an analyst.