Amata B. Grimm Power Infrastructure Fund (ABPIF), the countrys first power infrastructure fund, will make its SET debut on September 27

Stocks and Financial Services Press Releases Wednesday September 25, 2013 14:31
Bangkok--25 Sep--KASIKORNBANK
Amata B. Grimm Power Infrastructure Fund (ABPIF), the country’s first power infrastructure fund, will make its SET debut on September 27, offering high and secured returns.

KASIKORNBANK is introducing the Amata B. Grimm Power Infrastructure Fund (ABPIF), Thailand’s first power infrastructure fund, with approximately a nine-year investment period and first-year dividend of around 7.55 percent. Retail investors in the fund will enjoy withholding tax being waived. Power plants, the underlying assets of the fund, will generate income which ensures stable fund returns, given long-term power purchase agreements with the Electricity Generating Authority of Thailand (EGAT) and companies in the Amata Nakorn Industrial Estate. ABPIF will debut on the Stock Exchange of Thailand (SET) on September 27.

According to Mr. Suradech Kietthanakorn, First Senior Vice President of KASIKORNBANK, Amata B. Grimm Power Group, Thailand’s leading power producer, has offered ABPIF, the country’s first power infrastructure fund, at 10.50 Baht per investment unit for general investors since the beginning of the month. The 6.3-billion-Baht fund was subsequently oversubscribed more than one and a half times the issue allocation.

KASIKORNBANK has been appointed the financial advisor and underwriter for the fund, while Kasikorn Asset Management will manage the fund’s assets. ABPIF, which will debut on September 27 on the SET, is expected to be further embraced by investors given its high growth potential.

ABPIF will invest in the right to obtain benefits from Amata B. Grimm Power 1 and 2, power plants in the Amata Nakorn Industrial Estate, Chon Buri, for approximately nine years. The two power plants will be operated under power purchase agreements to sell electricity to EGAT and other factories in the industrial estate.

Paying dividends twice a year, the fund is expected to generate net returns as indicated in its prospectus at around 15.71 percent, of which 7.55 percent will be allotted as dividends, and remaining 8.16 percent as capital reduction from excess cash. The fund will offer capital reduction to investors every year. Individual investors will be waived withholding tax on the dividends for 10 years.

Mr. Nopdej Karnsuta, Chief Financial Officer of Amata B. Grimm Power Group, said “the company would like to express our gratitude for all investors interested in our ABPIF issue. Over the past year, the two power plants have combined revenues at 8.35 billion Baht and are expected to generate 8.7 billion Baht this year, up 4 percent. The EBITDA stood at 1.21 billion Baht, also up 2 percent compared to 1.18 billion Baht last year. The company also enjoys consistently-growing revenues from generating and selling electricity, as well as steam derived from gas-fueled power production processes. The group plans to expand its investments to a total of 16 power plants by 2019, which will consequently increase the group’s total production capacity to 2,000 megawatts. Given this, we partly raise capital via the infrastructure fund to finance construction of the new power plants as planned.”

He added that the group is likely to record an income increase of 4.8 billion Baht or more than 50 percent over-year to 14.5 billion Baht, while the EBITDA will also increase by 50 percent over-year to 2.04 billion Baht. Currently, the group’s five power plants are in operation, three of which are located in the Amata Nakorn Industrial Estate, Chon Buri, one in the Amata City Industrial Estate, Rayong, and the other in Vietnam. With total production capacity at 613 megawatts, these power plants sell electricity to EGAT and both electricity and steam to more than 200 customers in diverse industries across the industrial estates. Construction of another power plant will be completed within the year, also located in the Amata City Industrial Estate in Rayong; at which time the combined production capacity of the group’s total six power plants will reach 733 megawatts.

This year, the company has successfully been granted a 20-billion-Baht financial facility from local and international financial institutions in order to finance the construction of four new power plants in the Amata Nakorn Industrial Estate, Chon Buri and Bangkadi Industrial Park, Pathum Thani. These power plants, with a debt to equity ratio of 0.9 times and debt repayment ability of 1.4 times, will be run and commercialized from 2015 onwards.

Mr. Suradech added that ABPIF is an interesting investment alternative to the currently volatile stock market and low yield bonds. The two main power plants, the fund’s underlying assets, have obtained long-term power purchase agreements with the public and private sector. Apart from the fund’s stable operational results, ABPIF’s first-year tax-free dividends of 7.55 percent are much more attractive than pre-tax yields for government bonds with similar duration at 3.7 percent, which are not tax free.

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