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Published on April 2, 2008

Esso (Thailand) has set an indicative price range of Bt9-Bt13 for its initial public offering of up to 1.18 billion shares from April 21-22.

At the high end, the IPO deal would mobilise up to Bt15.35 billion, making it the largest this year, but still well below the largest ever of Thai Oil Plc (TOP) at Bt32 billion.

The price will be set on April 24, according to the oil refiner's filing with the Securities and Exchange Commission yesterday.

To attract investors, the company plans to pay a dividend of Bt1 per share to IPO subscribers.

The ex-dividend sign will be posted on its stock one month after it trades on the Stock Exchange of Thailand.

Of the total IPO shares, 875.91 million are newly issued and the remaining 326.25 million are held by the Finance Ministry.

The filing said 84.58 million out of the 875.91 million new shares are reserved in case of over subscription.

Following the share allocation, Esso (Thailand)'s registered capital will be increased to Bt17.11 billion and its market capitalisation will be Bt31.14 billion-Bt44.98 billion, based on the IPO price range.

ExxonMobile Corp's stake in Esso (Thailand) will be diluted from 86.77 per cent to 67.5 per cent, while the Finance Ministry, the only other shareholder, will no longer have any shares in the company after the IPO.

The IPO proceeds will be used to redeem a Bt19 billion syndicated loan due on December 8.

Phatra Securities Plc serves as the IPO's financial adviser.

Earlier, Areepong Bhucha-oom, director-general of the State Enterprise Policy Office, said Esso (Thailand) would launch an overseas roadshow this month to Hong Kong, Singapore, Europe and the US.

Esso (Thailand)'s complex has a rated refining capacity of 177,000 barrels of oil a day and 500,000 tonnes of paraxylene per year. The unit of ExxonMobile also operates a chain of gas stations.

It earned Bt7.05 billion on sales of almost Bt200 billion last year, up from Bt1.5 billion and Bt195 billion in 2006.

A stock analyst said the listing of Esso (Thailand) would stimulate investors' appetite in IPO shares, which has already dried out.

So far this year, Lohakit Metal Plc (LHK) is the only company to list on the SET. However, its debut was poor, falling 23.91 per cent below its offering price of Bt2.76.

Brokerages are bullish on the oil refinery business as their gross refining margin is on the recovery path after several refiners, which had planned to come on stream late this year, delayed their start-up.

Meanwhile, the SET said TMB Asset Management has been assigned to establish and manage the country's first equity ETF based on the SET Energy Sector Index.

The fund, expected to be available to the public in July, will be less than Bt300 million, with the SET subscribing up to Bt30 million.

Siriporn Chanjindamanee

The Nation