PTT to divest palm-oil trade
Venture in Indonesia has been costly and unprofitable
PTT says its board of directors yesterday approved the sale of its palm-oil business.
Amid a sharp drop in world crude-oil prices, the state energy conglomerate announced that its board was okay with Kalimantan Thailand Palm Pte, a subsidiary of PTT Green Energy (PTTGE SG), divesting its 95-per-cent interest in Mitra Aneka Rezeki (MAR) to Prasada Jaya Mulia.
The board also approved PTT Green Energy Services (Netherlands), a subsidiary of PTTGE SG, transferring debts and advance subscription payments to Harvey Bay Overseas.
MAR was established to operate PTT’s palm plantation and palm-oil refinery business in Indonesia.
It was geared up to develop two projects there, the Pontianak project in West Kalimantan and the Banyuasin project in South Sumatra.
The share sales, debt transfer and advance payment contracts were inked, conditional to approval by buyers and sellers’ shareholders and involved authorities.
The transactions are expected to be completed by next June, and are in line with PTT’s policy to restructure its business.
“No expertise” in renewables
In its stock-analysis note, Maybank Kim Eng Securities (Thailand) said the sell-off came in line with the plan that PTT had announced earlier. It should help cut losses in a business that PTT has invested in for several years, without being able to generate profits.
“This only shows that PTT is not successful in doing renewable-energy business abroad as this is a business it has no expertise in,” the brokerage house said.
The procedure is not expected to affect PTT much, though it still has not revealed financial details of the sales plan, Maybank said.
Another analyst said the divestiture did not come at a good time, though PTT might need to find cash to reduce impacts from the current drop in world oil prices.
PTT shares closed at Bt314 yesterday, down Bt16 or 4.85 per cent from the previous closing.
