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Thailand's Gulf Energy marks market debut with 27.8pc jump



Gulf Energy Development, Thailand's third-largest power producer, made its market debut with shares trading at 27.8 per cent above their initial public offer (IPO), underscoring a rebound in Thai listings after a slump last year.
The IPO was Thailand's largest corporate listing in a decade, raising 24 billion baht ($736.20 million) at an IPO price of 45 baht per share. The stock opened trade at 57.5 baht. 
The debut followed similar successful starts for B. Grimm Power ABPIFu.BK and TPI Polene Power TPIPP.BK as investors take heart from a pick-up in exports and tourism. The junta's setting of an election for November 2018 - its most precise date since taking power in a 2014 coup - has also bolstered sentiment.
The IPO's "timing was good," said Prinn Panitchpakdi, country head at CLSA Securities, citing strong investor demand for the utility segment and a turnaround in Thai markets.
Gulf Energy is the third power company to list on the Thai bourse this year.
"Gulf has one of the best growth profiles out of the utilities and power companies," Prinn said. Future challenges will be securing power-purchasing agreements from the government and ensuring continued growth, Prinn added.
Gulf will use funds raised in the IPO as working capital, to repay loans and to finance gas-fired and biomass power plant construction, to increase total installed production capacity by 6,353.6 megawatts (MW) by 2024, it said in a statement.
The company plans to invest around 20 billion baht next year for expansion, Chief Executive Sarath Ratanavadi told reporters. It also plans to borrow 40 billion to 50 billion baht from domestic and foreign banks to add 5,000 MW of capacity, he said.
Gulf, which specialises in gas-fired power plants, reported third-quarter profit of 675.83 million baht in the three months through September, up 11.3 per cent from the same period last year.
The firm is the largest company to float since 2006 when Rayong Refinery raised 27.2 billion baht.