CEN to float shares in robust subsidiaries
Capital Engineering Network Plc (CEN) will float shares in those of its subsidiaries that can stand |on their own two feet, with Ua Withya, a steel structure manufacturer and general fabricator, the first to list.
CEN’s three other subsidiaries are Enesol, a power plant developer, Rayong Wire Industries and Pipeline Engineering.
Ua Withya (UWC) will issue 99.49 million new shares, of which 28.3 million will be sold to existing shareholders of CEN from June 11-14 and the remainder will be offered to the public from June 18-20 at the price of Bt1.80 per share.
It will start trading on the Market for Alternative Investment in early July.
Country Group Securities is |the underwriter and KT Zmico Securities, Capital Nomura Securities and Phillip Securities (Thailand) are co-underwriters.
CEN CEO Wutichai Leenaban-chong said yesterday that UWC in the past has shown sustainable growth in line with the rise in electricity consumption and the development plan of the Electricity Generating Authority of Thailand (Egat).
UWC is among four companies that were granted steel transmission tower licences for 500 kilovolts from Egat. UWC this year plans to bid on public and private projects worth more than Bt3.8 billion, in addition to its backlog of Bt520 million.
UWC is an outstanding example of a company that can grow by itself and can raise its own funds to support further growth. UWC will use the listing proceeds to expand production capacity and increase working capital.
UWC expects to boost revenues by 25 per cent to Bt1 billion this year.
Although the IPO will dilute CEN’s stake in UWC from 90.98 per cent to 65.12 per cent, CEN will still be a major shareholder.
CEN’s policy is to remain as a major shareholder in its subsidiaries and to enjoy a high return on investment.
CEN projects its revenue this year will be up at least 15 per cent thanks to UWC, which contributes 40 per cent of its total revenue.
However, the major revenue generator would be the power business in the near future.
Enesol operates two cogeneration power plants with total capacity of 11 megawatts. The company is in talks with two to three investors to develop a 7MW turnkey cogen power project. The deal is expected to be finalised this year.
CEN is conducting a feasibility study on the solar farm business through Enesol. It is also looking at buying a coal mine to support the electricity generating plants in the future.
Enesol would likely be the next subsidiary to be listed, he added.
