Indorama Ventures PCL will list and commence trading on February 5. It is the first company to list on the Thai bourse this year, with a market capitalization at its initial public offering (IPO) price of over THB44.00 billion (approx. USD1.33 billion). The company will be in the Industrials Group, Petrochemical & Chemicals Sector, using “IVL” as its trading symbol, and comes from restructuring shareholdings of the business group.
“This listing of IVL supports SET’s strategy in 2010 to encourage large companies to list. SET aims at increasing its market capitalization by THB100 billion (approx. USD3.02 billion) from new listings this year,” revealed SET Chief Marketing Officer, Issuer & Listing Vichate Tantiwanich.
IVL is the holding company of domestic and international firms involved in integrated petrochemical products. These companies have 13 production facilities in five countries worldwide and manufacture and/or distribute polyester fiber and yarn, with highest production capacity in the country, and polyethylene terephthalate (“PET”), with the world’s second largest production capacity.
IVL has a total paid-up registered capital of THB4.33 billion (approx. USD130.74 million), with a par value of THB1.00 each, consisting of 3,352 million existing common shares and 583 million capital increase shares to exchange with shares held by Indorama Polymers PCL (IRP)’s retail investors at 1 IRP share for 1.4150 IVL share. At its IPO on January 25-27, 2010, IVL offered 400 million shares and 60 million Green shoe option shares, or a total of 460 million shares, to the general public at THB10.20 per share. The funds raised will be used for debt repayment and general operations, including as working capital. Bualuang Securities PCL was its financial advisor and underwriter.
The IPO price of THB10.20 per share came from book-building process among institutional investors. IVL’s dividend payment policy is to pay out no less than 30% of profit after taxes and legal reserves.
For more information about Indorama Ventures PCL, please see the company’s prospectus at the Securities and Exchange Commission (SEC) at www.sec.or.th and for general information at www.indoramaventures.com, and www.set.or.th.
Sunday, February 7, 2010
Friday, February 5, 2010
Fitch: APAC Oil & Gas Credit Quality To Remain Broadly Stable
Fitch Ratings has said today, in its "Asia-Pacific Oil & Gas: Credit Outlook 2010" report, that the overall credit outlook for the sector is broadly stable, although the outlook for some refiners remains negative.
"Most exploration & production (E&P) and integrated companies have significant headroom at their rating levels," says Steve Durose, head of Fitch's Asia-Pacific Energy & Utilities team. "Major investments to boost reserves and production, either organically or through acquisitions, are therefore not expected to exert any significant downward pressure on their ratings," adds Mr. Durose.
Whilst upstream oil businesses' cash flows can be unpredictable due to their dependence on volatile international oil prices, Fitch rates through the economic cycle and therefore does not upgrade during periods of high oil prices and downgrade when prices fall. Fitch expects that 2010's oil prices will benefit from inflationary expectations and the significant amount of liquidity being injected into the global financial markets. Therefore, the agency broadly expects operating cash flows to increase for upstream and integrated oil companies. However, Fitch does not expect balance sheets to strengthen significantly as any additional cash generated is likely to be spent on investment.
"On the other hand, downstream refiners will generally continue to face industry-wide capacity surplus, constraining utilisation and margins," adds Mr. Durose. Furthermore, the creditworthiness of some downstream Asia-Pacific oil and gas companies continues to be constrained by the obligation to supply refined products at prices which are subject to political influence rather than economically cost-reflective. If crude prices rise significantly above current levels for a sustained period, this risk will become more acute.
The ratings of many of the region's oil and gas companies are supported by their close legal, operational and strategic ties with respective government owners. Fitch does not expect the implied or actual government support for any of these companies to weaken in 2010.
"Most exploration & production (E&P) and integrated companies have significant headroom at their rating levels," says Steve Durose, head of Fitch's Asia-Pacific Energy & Utilities team. "Major investments to boost reserves and production, either organically or through acquisitions, are therefore not expected to exert any significant downward pressure on their ratings," adds Mr. Durose.
Whilst upstream oil businesses' cash flows can be unpredictable due to their dependence on volatile international oil prices, Fitch rates through the economic cycle and therefore does not upgrade during periods of high oil prices and downgrade when prices fall. Fitch expects that 2010's oil prices will benefit from inflationary expectations and the significant amount of liquidity being injected into the global financial markets. Therefore, the agency broadly expects operating cash flows to increase for upstream and integrated oil companies. However, Fitch does not expect balance sheets to strengthen significantly as any additional cash generated is likely to be spent on investment.
"On the other hand, downstream refiners will generally continue to face industry-wide capacity surplus, constraining utilisation and margins," adds Mr. Durose. Furthermore, the creditworthiness of some downstream Asia-Pacific oil and gas companies continues to be constrained by the obligation to supply refined products at prices which are subject to political influence rather than economically cost-reflective. If crude prices rise significantly above current levels for a sustained period, this risk will become more acute.
The ratings of many of the region's oil and gas companies are supported by their close legal, operational and strategic ties with respective government owners. Fitch does not expect the implied or actual government support for any of these companies to weaken in 2010.
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