B Grimm plans IPO in Q4 to support diversification

Corporate January 19, 2016 01:00

By PICHAYA CHANGSORN
THE NATION

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B GRIMM POWER, which runs a portfolio of 17 fossil-fuelled small power plants, plans to raise up to Bt30 billion from an initial public offering in the fourth quarter to help fund its diversification into renewable energy and overseas ventures.



Bualuang Securities, Kasikorn Securities, Phatra Securities and Deutsche Bank have been appointed as the financial advisers for the IPO, which is tipped to be one of the largest this |year.
Preeyanart Soontornwata, president of the flagship of diversified trade and manufacturing concern B Grimm Group, told The Nation that the listing was expected to boost her company’s market capitalisation to between Bt50 billion and Bt60 billion.
B Grimm Power has shown stellar growth averaging 22 per cent annually over the past three years. Based on its project backlog, the company targets leaping ahead by 17 per cent annually to 2021. 
“We will try to keep our growth profile of 20 per cent per year, since we’re now ready in every aspect, from our strong team, and the credibility that we have won from the banks that have seen how we have operated all our power plants at high efficiency and how all of the projects came under budget,” she said.
The 17 small-power-producer plants all operate under long-term power purchase agreements (PPAs), so the company is as financially solid as large players like Electricity Generating and Ratchaburi Electricity Generating Holding, she said. 
To find higher growth opportunities, the company has started to move into renewable and overseas power projects. 
In Laos, it has signed agreements to develop nine hydroelectric projects. 
The first one will be the 20-megawatt Xenamnoy and Xekatam hydropower plant, due to be commissioned next year. 
It has secured credit support from Bangkok Bank and the Export-Import Bank of Thailand. 
B Grimm has found a strong local company, the Vorachith group, as its partner in that project as well as in other hydropower projects to be developed in Laos until 2020. 
The future projects include the 15MW Nam Che, 30MW Tadsakhoi and 97.5MW Nam Khao projects. 
B Grimm also has a 25-per-cent stake in the 420MW Se Kong 4 project, with Ratchaburi Electricity Generating as the major shareholder.
The Bt5.3-billion acquisition of Sime Darby’s two combined-cycle co-generation plants in Laem Chabang, which was disclosed in June 2014 as the company’s first merger-and-acquisition exercise, has given it a good reputation, Preeyanart said. That deal brought in many others for the firm. 
Without laying off a single worker, B Grimm was able nearly to double the profits of the Laem Chabang power plants within the first year.
B Grimm is targeting increasing its revenue from Bt23.7 billion last year to Bt58.4 billion in 2020 and net profit from Bt1.94 billion to Bt5.82 billion. 
Counting only on PPA-committed projects, it will have 44 power plants with combined capacity of 2.86 gigawatts by 2020, of which 2.15GW will be co-generation, 583MW hydropower, 114MW solar power, 16MW wind power and 13MW diesel-fired power plants.
However, the target is to achieve 5GW capacity in four years.
B Grimm is also eyeing investing in other Asean countries including Myanmar where it was ranked third in the international bidding to build Myanmar’s largest gas-fired independent power plant in Myingyan.
It is conducting a due-diligence to acquire nearly 40 per cent of an Indonesian power company, the results will be known by the end of this month.
Preeyanart has been with B Grimm for more than 25 years. She was instrumental in the group’s first foray into the power business in 1993, which now contributes 70 per cent of the group’s revenues.