Utilities and Power subsidiary of WHA poised for IPO this quarter

Corporate January 12, 2017 01:00


WHA Utilities and Power Plc (WHAUP), which is scheduled to launch its initial public offering in the first quarter, is “appealing” because of its many unique qualities, its executives and financial adviser said.

“The customer base is very clear. They are situated in industrial estates, most of them heavy industries that consume a lot of water and electricity,” Veena Lertnimitr, executive vice president for primary distribution at Siam Commercial Bank, the financial adviser to WHAUP, said yesterday.

The stock will be the only one of a company that engages in both the water and electricity businesses, |she said. The subsidiary of WHA Corporation Plc, a leading logistics and industrial estates developer, revealed at a first press conference that the Securities and Exchange Commission had approved its application for the IPO of up to 229.5 million shares, or 30 per cent of its paid-up capital. 

Besides SCB, the firm is considering CLSA (Thailand) as its underwriter for foreign institutional investors.

Veena said WHAUP could gain “synergy” from the WHA Group, including providing utility, wastewater management and waste-to-energy services to the group’s expanding industrial parks. 

“The firm has a strong partnership in the power business, which has already been proven,” she said. 

WHAUP’s equity partners in power-generation projects in Thailand and Laos are Gulf Group, Glow Group, B Grim Power and Gunkul. 

Jareeporn Jarukornsakul, chief executive officer of WHA Group, said WHAUP was among a handful of companies that have both a “growth story” and recurring income.

“This 2-in-1 quality is hard to find in any company. Last year, it had revenue of more than Bt2 billion with profits of over Bt1 billion,” she said.

Somyos Anantaprayoon, chairman of WHA and WHAUP, said that from its committed power projects alone, WHAUP would grow 15 per cent annually until 2019. 

The firm is constructing power plants with a combined capacity of 760MW, of which its equity share will be 190.07MW, which will be added to its current equity megawatt capacity of 349.55MW. 

The planned IPO comprises 125 million new shares and 104.5 million shares held by H-International (SG). 

The allotment will include a pre-emptive rights offering to WHA shareholders. 

The IPO proceeds will be used to finance the firm’s utilities and power businesses, supplement working capital and repay loans to financial institutions. 

Its debt-to-equity ratio will be cut from the current 1.3 times.

Wisate Chungwatana, CEO of WHAUP, said the firm plans to expand its utility business to cover more products and industries as well as to enlarge its customer base to industrial and municipal customers outside industrial zones.