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Bangkok Expressway plans to use a Bt4-billion debenture issue to boost liquidity during the credit crunch.

Panan Tosuwanthaworn, senior general manager of the finance division, said yesterday that the company's traffic volume this year was expected to be lower than last year's level, with the Bang Phli-Suksawad Expressway free toll being the main factor affecting its revenue.

Bangkok Expressway estimates an average volume of 900,000 vehicles a day, against last year's 927,570.

"The company [expects to] lose volume of 40,000 cars per day, equal to daily revenue of Bt800,000 to Bt1 million," she said.

Despite the lower traffic volume, revenue is continuing to grow slightly, as a result of the Bt5 toll-fee increase in September. This will boost income in the fourth quarter, she added.

However, the company believes that the overall revenue will turn more positive after the Bang Phli-Suksawad Expressway starts collecting toll fees in the first quarter of next year.

"We predict that traffic volume will come back to about the range of 12,000 to 15,000 cars per day," Panan said.

The company is concerned that if the economic slowdown and unemployment rise next year, then there will be fewer users of the expressway system. Moreover, if oil prices start to increase again, this will also affect toll revenue.

The uncertain economic situation has led the company to take measures to secure its financial liquidity, with the planned Bt4-billion debenture issue a central element of its strategy.

Panan said the debenture, which has a coupon rate of 5.2 per cent and is open to individual investors until Thursday, is part of the company's risk management for repayment of its debt.

Bangkok Expressway's board in 2007 approved overall debentures of Bt15 billion, of which the first Bt7.5-billion tranche was issued last year.

Panan said the company's outstanding loan attracted interest at the minimum lending rate of 7.5 per cent. The Bt4-billion debenture helps to manage the debt risk. Moreover, it forecasts that interest rates will later be on an upward trend, she said.

Panan added that the debenture would reduce the cost of long-term debt. It will enable the company to repay debt of Bt4 billion.

Investors, especially institutional investors, have welcomed the issue, as debentures are an appropriate investment vehicle in the current financial climate.

Bangkok Expressway plans to issue additional debentures of Bt3.5 billion next year, she said.

Kiatnakin Securities forecasts Bangkok Expressway will record a net profit of Bt1.24 billion this year, 12 per cent below last year's Bt1.4 billion.

The current free use of the Bang Phli-Suksawad Expressway, high oil prices since early in the year and the overall economic situation are the main factors behind the predicted drop in profit.

Kiatnakin believes the outlook for traffic volume will be better, given the Bangkok Expressway's increased toll fee from September 1, the recent sharp decline in oil prices and the Bang Phli-Suksawad Expressway toll-charge collection next year.

Moreover, Bangkok Expressway will realise additional toll revenue from the Chaeng Wattana-Bang Sai expressway, for which its charge per vehicle was increased by Bt5 on November 1.

Kiatnakin forecasts the company's net profit next year will rise to Bt1.51 billion.