Rumors of Phatra Buying Power Plant for GLOW Spread, Booking Fee and SPP1 Day Care

On December 26, 2018, the Office of the Energy Regulatory Commission (ERC) had resolved to approve, in principle, the proposed merger of Global Power Synergy Public Company Limited (GPSC) and Glow Energy Public Company Limited (GLOW) for the share acquisition transaction, both directly and indirectly, with respect to 1,010,976,033 GLOW shares (equivalent to 69.11% of the total issued shares of GLOW or 90.59 billion baht.)

The approval of the ERC is granted subject to a condition precedent that GLOW must sell Glow SPP 1 Co., Ltd. (SPP1) before or at the same time as the merger of GPSC and GLOW.

 

Later today, a reporter reported that a certain financial advisor revealed that Phatra Securities, as a financial advisor in the deal between GPSC and Engie Group (GLOW’s seller) will buy the SPP1 power plant from GLOW according to ERC’s condition. Once GPSC and GLOW are merged, the contract indicated that Engie Group must repurchase the share once from Phatra Securities.

It was also reported that Phatra Securities earned compensation worth 3 million dollars or equivalent to 93 million baht, as well as advising GPSC as a financial advisor in the deal between GPSC and GLOW as well.

However, the source did not confirm whether Phatra Securities had already signed the aforementioned contract or not. The case should be under an observation whether ERC will accept this deal as an actual transaction or not.

Meanwhile, is it appropriated that Phatra Securities, as a financial advisor, also invested in power plant businesses as well as a financial advisor to GPSC (buyer), while received compensation from Engie (seller)? Is this according to the objective or condition regarding protecting contractors’ privacy?

“The deal on SPP1 is a problematic one because BGRIM, WHA or AMATA would not want this power plant as it is quite old.” said the source. “Moreover, buyers would discount the price to the point that GLOW would earn nothing from the trade. The deal that is said to temporary sell to Phatra would not pass the approval of ERC and SEC. This will make Engie to be involved in the transaction as well.”