• 
• 

Published on December 7, 2007

Thai Tap Water Supply (TTW) will make an initial public offering of 1 billion shares next quarter.

"We expect Thai Tap Water Supply's IPO and debut to be launched in the first quarter of 2008," managing director Sompodh Sripoom said yesterday.

"The company will conduct roadshows in foreign and domestic markets. We're confident market sentiment at that time will be bright, following formation of the next government. The shares are expected to receive a warm welcome from investors, given its sound fundamentals. The stock will emerge as the first listed tap-water company, and it will be listed under the energy sector, which is attractive to investors."

Of the 1 billion IPO shares, 700 million will be newly issued and 300 million will be sold by the company's five major shareholders.

TTW's shareholders consist of Ch Karnchang with 47.7 per cent, Mitsui Water Holding (Thailand) with 35 per cent, Bangkok Expressway with 12.5 per cent, Bangkok Bank with 2.5 per cent and TMB Bank with 2.3 per cent.

Proceeds will be used to repay Bt3 billion worth of debts incurred from the recent acquisition of Pathum Thani Water (PTW). The company also has long-term debts of Bt1 billion, which will be paid off in January 2013. The country's largest privately owned tap-water producer and distributor plans to spend between Bt1.3 billion and Bt1.4 billion to expand capacity from 320,000 cubic metres per day to 420,000.

The company will use about Bt800 million from its internal cash flow and the rest from the IPO proceeds to fund the capacity-expansion plan.

TTW now runs at a capacity of 270,000 cubic metres per day.

"We predict demand for tap water will remain high," Sompodh said.

Sales have grown a robust 40-50 per cent over the past two years. In this year's second quarter, TTW generated sales of Bt1.4 billion.

TTW and PTW hold 30-year and 25-year water-supply contracts, respectively, with the Provincial Waterworks Authority.

Esso (Thailand) and Star Refining Petroleum are two other big-market cap stocks preparing to raise funds from the public next year.

Meanwhile, Demco said it would change its fund-raising plan from selling capital-increase shares through private placement to issuing 88.6 million warrants to existing shareholders, due to volatility in the stock market.

Managing director Pradej Kittiitsaranon said the board of directors cancelled the planned private placement of common shares and opted for the warrant issue instead.

He said private placement did not fit the current market environment.

Demco will issue 88.6 million units of two-year warrants free of charge to existing shareholders, exercisable for Bt4.50 apiece.

Siriporn Chanjindamanee

 The Nation