Thursday, May 3, 2012

ITD set to sell stakes

Italian-Thai Development Plc (ITD) is in the process of divesting its ownership in Thai potash and Laotian aluminium projects to raise funds for its capital-intensive Dawei project in Myanmar.

ITD president Premchai Karnasuta said the company has agreed to partially sell its stake in a US$1.2-billion aluminium mine in Laos to a Chinese partner, reducing its ownership to 30% from 45%.

The firm has also been in talks with seven or eight strategic partners for its $800-million potash mine in Udon Thani, though it will maintain a controlling stake.

ITD holds a 90% stake in the potash project with the government holding the remaining shares.

The company's German technical adviser is preparing an environmental impact study of the project to win a mining licence by year-end.

"If we can sell these two assets, we will not need to increase registered capital," said Mr Premchai.

The shareholders agreed yesterday to ITD's plan to issue 1.677 billion new shares, with 1.258 billion shares for rights offerings and 419.36 million for private placement. ITD's registered capital would increase to 5.87 billion baht from 4.19 billion.

Mr Premchai said Japan, Thailand and Myanmar agreed to set up a three-country organisation to back up the Dawei project.

The Japanese government already agreed to extend loans to Dawei.

"We expect to wrap up a long-term loan agreement by the end of this year," he said, adding about 1 billion baht has been invested in the Dawei project.

The deep-sea port requires $2.5 billion in capital with $1 billion for roads. Another $5 billion will be spent on utility and draining systems.

About 60% of the cost for each project will be financed by loans and the rest with equity.

"The highest risk for this project depends on whether we are able to borrow for investments," Mr Premchai told shareholders yesterday.

Construction of a 150,000-rai Dawei estate is scheduled to commence by the end of this year or early 2013. The project will be completed and officially launched in 2015.

Land sales will start in 2014 and are expected to be sold out within 10 years.

ITD signed a memorandum of understanding to sell 3,000 rai to Ratchaburi Electricity Generating Holding Plc, Thailand's largest private power producer, to construct power plants. Another sale of 12,500 rai for an integrated steel plant should happen this year, he added.

"We are finalising a shareholder agreement with a Japanese partner for the steel plant," said Mr Premchai.

ITD's backlog totalled 120 billion baht by the end of the first quarter, and its goal is to reach 200 billion baht by year-end.

Shares of ITD closed Friday on the SET at 3.66 baht, up 10 satang, in trade worth 209.94 million baht.