Thai regulator blocks US$4 billion sale of Engie’s Glow to PTT

Department of Fisheries personnel backed by Royal Thai Navy forces prepare to drop artificial reefs made from decommissioned electrical insulators donated by a state-owned power utility firm off the coast of Thailand’s southern province of Narathiwat (AFP pic)

BANGKOK: Thailand’s energy regulator has blocked PTT Pcl’s bid to acquire power firm Glow Energy from France’s Engie for up to US$4 billion, in what would have been the country’s largest investment deal this year.

“The acquisition would have led to a monopoly in some industrial areas and therefore it is considered to reduce competition,” the Energy Regulatory Commission of Thailand said in a statement on Thursday.

Former finance minister Korn Chatikavanij submitted a letter to Prime Minister Prayuth Chan-ocha in September requesting the ERC investigate the deal.

PTT, an oil and gas supplier in which the government owns a 51% stake, said in June it had agreed to buy 69% of Glow from Engie via its power unit, Global Power Synergy Company Pcl.

GPSC said in a statement that it would not make the tender offer.

“We respect the decision,” PTT chief executive Chansin Treenuchgron told reporters, adding that an appeal would be “up to GPSC’s board”.

For Engie, the sale of the Glow stake would have rounded off a two-year plan to sell off some 15 billion euros of non-core assets and re-invest those proceeds away from coal and into areas such as renewable energy, power grids and energy services.

Engie said it was analysing the Thai regulator’s decision, and that its drive to reduce debt remained well on track.

“We have other options for selling our stake in Glow,” the company said.

Excluding Glow – which has one gigawatt of coal and two GW of gas-fired generating capacity – Engie still has seven GW of coal-fired capacity.

Glow shares slid as much as 6.9% against a broader market decline of nearly 3%. Engie shares were down 1.9%, underperforming the CAC40 index, which was down 1%.

Glow operates 10 power plants in the Map Ta Phut industrial estate in Thailand’s east, home to oil refiners such as PTT subsidiary PTT Global Chemical.

The area is part of the government’s $45 billion Eastern Economic Corridor project to boost investment in high technology industries.

The acquisition would have expanded GPSC’s capacity to 4,835 megawatts, making it the country’s fourth-largest electricity producer after state-owned Ratchaburi Electricity Generating Holding Pcl.

PTT, privatised in 2001, is often criticised by non-governmental groups for not being transparent enough in its business practices.