Bangkok--20 Apr--MT Multimedia
SEC has accepted the filing for an IPO of up to 420 million capital-increase shares of common stock of Universal Utilities, a leading provider of integrated water supply management solutions. The SET listing is expected to take place in mid-2016. The company's management highlighted the corporate strengths offered by its reverse-osmosis-based seawater desalination technology, which helps reduce water shortages in Thailand's key tourist sites and enhance domestic tourism growths, and by the company's long-term contractual partnerships with PWA and local administrations, which help maintain the security of the water supply systems for the provincial and local communities and cater to future water demands.
Mr Prasert Tantayawit, Managing Director Investment Banking Department, Maybank Kim Eng Securities (Thailand), as Financial Advisor, revealed that Universal Utilities (UU) has made a required filing for an initial public offering (IPO) of up to 420 million capital-increase shares of common stock, which will represent up to 45% of the company's post-IPO number of authorised and issued share of common stock, and that most recently the Securities Exchange Commission (SEC) has formally accepted the filing.
UU's current authorised capital stands at THB 930 million, divided into 930 million shares of common stock, with par value at THB 1 each. The company has 510 million authorised and issued shares, which means that it can issue up to 420 million capital-increase shares. Up to 353 million IPO shares will be allotted to the public and the remainder of up to 67 million for an exercise of the preemptive rights by Eastern Water Resources Development and Management (EW).
UU will fix the IPO date and the SET listing date after its presentation to interested analysts and investors. The events are expected to occur during Q3/15, and the funds raised by the IPO will be used to repay bank loans and as working capital.
The Financial Advisor added that UU is a leading provider of integrated water supply management solutions, operating its businesses both directly and through four subsidiaries: Chachoengsao Water Supply, Bangpakong Water Supply, Nakhonsawan Water Supply and EGCOM TARA. By production method, its businesses can be classified into two segments: surface water-based water supply business and seawater-based water supply business. It produces and supplies water to contractual partners, including State authorities, e.g. Provincial Waterworks Authority (PWA), local administrations, etc., and to retail consumers directly. In addition to managing water supply systems for EW, it makes investments in, and manages, water supply businesses in several areas within different contractual frameworks, i.e. BOO (Build-Own-Operate), BTO (Build-Transfer-Operate), BOOT (Build-Own-Operate-Transfer) and lease. All contracts are long-term, with terms ranging from 15 to 30 years.
Mr Cherdchai Pitiwacharakul, UU's acting managing director, noted that UU is fully equipped with experiences and expertise in water supply management. Its strengths lie in its position as Thailand's pioneer in reverse-osmosis-based seawater desalination technology, which involves separation of salt from water. The technology, he said, is being employed under public-private joint investment schemes to reduce water shortages in Thailand's major tourist attractions and maintain the stability and efficiency of tap water production and supply to the public, including tourists.
UU has long-term investment contracts in the categories of concession contracts and water supply management contracts with several public authorities, including PWA, Tambon administrative organisations and municipalities. Those long-term contracts have enabled UU to limit its exposure to risks associated with water production and supply and enhance management efficiency in the public sector through territorial expansion of the water supply networks to achieve maximum customer satisfaction. The company is also pursuing opportunities to win new water supply management projects, both domestically and internationally, and satisfy future demands for water consumption.
For FY2015, UU's total revenue stood at THB 1.272 billion and net income at THB 187.6 million, a 59% rise from THB 118.6 million in FY2014, achieved through continuous growths in sales from water supply, the company's main revenue source, and effective cost management.