GPSC Invests ฿24bln. to Take Over TOP’s “Energy Recovery Unit,” Expecting PAC in 2023

Global Power Synergy Public Company Limited (GPSC) has announced that the Board of Directors’ Special Meeting No. 2/2019, convened on 21 January 2019, resolved to approve the investment through the acquisition of the Energy Recovery Unit (ERU Project), which is a part of the Clean Fuel Project (CFP) of Thai Oil Public Company Limited (TOP).

The transfer of ownership in the ERU Project from TOP will not exceed USD 757 million (฿24,113 million), which will be after the construction of the ERU Project is completed and the Provisional Acceptance Certificate (PAC) is issued under the CFP.

In this regard, GPSC expects that the construction of the ERU Project will be completed and the PAC will be issued in the third quarter of 2023; and to enter into other relevant agreements, i.e. the Asset Sale and Purchase Agreement, the Fuel and Utilities Supply Agreement, the Power Purchase Agreement, the Operation and Maintenance Services Agreement, and the Land Sub-Lease Agreement, as well as a Novation Agreement and any other agreements.

These agreements are necessary and related to the asset sale for the acceptance of ownership transfer in the ERU Project and the entry into the Relevant Agreements with TOP, who is a major shareholder of GPSC, holding, directly and indirectly, more than 10% of the total issued shares of GPSC.

 

The entry into this transaction is consistent with the strategic plan in the business operation of GPSC, which emphasizes on investment expansion in line with the strategy aiming at growth alongside the PTT Group, which will allow GPSC to extend its power and utility production business which makes use of other different fuels. Furthermore, the transaction will promote investment in order to bring about energy security in the future.

In this regard, GPSC shall propose the transaction for consideration and approval at the 2019 Annual General Meeting of Shareholders, which shall be convened by April 2019.

The ERU Project is a unit for the production of electricity and steam to be delivered back for use in the CFP, whereby the ERU Project will mainly use petroleum pitch, which is a by-product of the refinery process of the CFP. The ERU Project has an installed production capacity of electricity and steam of approximately 250 MW and 175 tons per hour, respectively.

For the investment in the ERU Project, GPSC will use its internal cash flow and/or will seek funding from other sources as necessary and appropriate, such as obtaining financing from financial institutions.