Tuesday, December 18, 2007

Thai cabinet lays out plan to transfer PTT pipelines

BANGKOK (AFP) — Thailand's government Tuesday laid out its plan for the court-ordered transfer of energy giant PTT's 15-billion-baht (445-million-dollar) pipeline network back to the state.

Under the arrangement, PTT will have to pay the state five percent of its revenue from gas transmission as a rental fee for using the network, the company's president Prasert Bunsumpun told reporters.

The transfer of the pipelines was ordered Friday by the Supreme Administrative Court, in a ruling that challenged the legality of PTT's privatisation in 2001.

The verdict upheld the company's listing on the Stock Exchange of Thailand (SET), but acknowledged concerns brought by consumer groups who argued against leaving vital national infrastructure in private hands.

The judges ordered the Finance Ministry, which already holds a 52 percent stake in the company, to take back control of the pipelines.

"The cabinet today agreed in principle for PTT to transfer our assets back to the Finance Ministry," Prasert said as he left the cabinet meeting.

"Also, PTT will have to pay the state a five-year retroactive pipeline rental charge of at least five percent of the revenue generated from gas transmission," he told reporters.

He declined to say what impact that would have on the company's financial results.

PTT, the kingdom's biggest energy firm, is the largest stock on the Thai bourse with a market capitalisation of 1.01 trillion baht (30 billion US dollars).

Following the cabinet decision, the SET allowed shares of the company to resume trading in the afternoon session. The stock had been suspended since early Friday.

"The status of the company is not affected (by the verdict). The company is still entitled to use such assets but has to pay the rental fee at the rate specified by the ministry of finance," PTT said in its filings to the bourse.

"The company believes that there is no effect on the company's operations and there will be minor effect on its financial status," it added.

Prasert said the cabinet resolution would cost PTT up to 11 billion baht (326 million dollars) to settle the five-year pipeline rental charges and to cover the taxes on transferring the company's assets.

"We have to pay up to nine billion baht for pipeline usage since 2001, including taxes and interest payments," he told reporters.

"Another two billion baht is for taxes for transferring our pipeline assets. The total amount would be paid in the last quarter of 2007," Prasert added.

Shares of PTT closed down 10 baht, or 2.72 percent, to 358 baht Tuesday.

No comments: