Thailand’s PTT rules out capital increase

While there have been looming concerns over PTT’s cash flow stability due to its heavy capital expenditure requirements, PTT Plc has reaffirmed its financial capability as adequate for new mergers and acquisitions. Chief Financial Officer Surong Bulakul said, “We have a debt-to-equity ratio of only 0.5, and it is not that difficult for us to find new funds through loans, self-financing, retained earnings and debentures, so there is no need to raise registered capital.”
According to him, PTT is cautious about every project it acquires, trying its best to steer clear of high-risk investments. However, all affiliated firms are set to jointly plan funding management if PTTEP has large projects, which need massive funding, he said. He said that the purchase of Cove Energy, with proven large reserves of natural gas, for US$2.2 billion, is expected to enable PTTEP to produce liquefied natural gas at low costs, fulfilling its “obligation to procure LNG to cater to growing Thai demands.”
The Cove deal could also open the doors for PTT and it could become a partner in Rovuma area 1 and other not-yet-fully tapped petroleum projects in Mozambique and Kenya. The Rovuma field in Mozambique has estimated gas resources of up to 60 trillion cubic feet, including oil prospects in the Black Pearl structure; it is known as a world-class discovery. (September 3, 2012)