Siamgas and Petrochemicals plans to increase its revenue from overseas countries to 50 per cent over the next five years after submitting a bid to acquire the entire issued share capital of Shell Gas Singapore (SGLS) from Shell Gas Holdings (LPG).
Supachai Weeraborwornpong, managing director of Siamgas, said the revenue growth of Siamgas from now on would come primarily from overseas. The company earlier invested in Vietnam and China.
"We will gradually realise revenues from those countries, which will support the growth of overseas revenue in the next five years to 50 per cent of total revenue, from less than 10 per cent," he said.
In a filing to the Stock Exchange of Thailand, Supachai said the total value of the 100 per cent share capital of SGLS is US$15 million (Bt483 million).
The company's source of funds comes from working capital.
SGLS has annual sales of Bt940 million and earnings before interest, taxes, depreciation and amortisation (EBITDA) of Bt117 million.
"Even though the sales revenue of the gas business in Singapore is not much due to the small population, it contributes a higher margin than in Thailand," Supachai said.
SGLS currently has a 25per cent market share, with sales volume of 20,000 tonnes in Singapore.
Siamgas expects to start to realise revenue from the transaction next month. The project will boost revenue in the third and fourth quarters to grow by 15 per cent compared to the same quarters last year.
Siamgas wants the plant to enhance the potential of the company and increase its sources of income.
He noted that the board considered that the transaction was reasonable and beneficial to Siamgas since purchase of the 100 per cent share capital would increase sales and distribution of LPG in Singapore.
The company believes its 2010 revenue will grow by 15 per cent from Bt19.45 billion last year.
Siamgas stock price yesterday closed at Bt14.80, down Bt0.20.