The extraordinary shareholders’ meeting of Gulf Energy Development Public Company Limited discussed and approved the restructuring transaction, merging the company with Intouch Holdings Public Company Limited (INTUCH), expected to be completed and become a new company, ‘a great infrastructure empire’, within April 2025.
Mr. Sarath Ratanavadi, Chairman of the Executive Board of GULF, said that the transaction is expected to be completed in Q2/2025. The announcement of the merger between GULF and INTUCH is to restructure the related companies to maximize the benefits of management and investment in the future, as well as to reduce duplication of shareholding structures and expand growth opportunities in the energy and infrastructure and digital businesses to create future growth. The merger results in the termination of the two original companies and the formation of a new merged company (NewCo) with 1 original share in GULF to 1.02974 shares in NewCo and 1 original share in INTUCH to 1.69335 shares in NewCo
. For this deal, Gulf used both domestic and international credit lines, has credit lines, and financial institutions offered credit lines to Gulf of almost 400 billion baht, but it is estimated that the credit line will be approximately 89 billion baht, of which approximately 82 billion baht will be used for VTO for AIS and 7 billion baht for Thaicom.
This merger will help businesses become more flexible, increase revenue and profits in energy, infrastructure, data centers, and cloud businesses, etc., to overcome long-term volatility and create balance, divided into smart technology energy, infrastructure and utilities, data centers, and cloud businesses, etc.
‘When combined into a new company, the initial revenue will come from the power and telecommunications business in the proportion of 80:20, but in the future it may be 50:50 because the telecommunications, data center, and cloud systems businesses are still growing. The company plans to invest an additional 100 megawatts in cloud from the previously
announced 50 megawatts, with the investment starting early next year,’ said Mr. Sarath.
For the cloud service business, the company and Google expect to see clear investment plans in early 2025. After 25 June 2024, Gulf Edge Co., Ltd. (Gulf Edge), a subsidiary in which the company holds 100% of the shares, joined with Google Asia Pacific Co., Ltd. (Google) to operate the Google Distributed Cloud air-gapped (GDC air-gapped) cloud service business for organizations in Thailand, the company recently established Gulf Edge Services Co., Ltd. (Gulf Edge Services) with the objective of managing the cloud business and providing related services to customers to support the growth of the company’s digital business group. It is confident that this cooperation will be clear in early 2025, and currently, there are many customers who have contacted us.
‘As for the purchase of GULF shares from shareholders who voted No, I am ready to purchase all of them at yesterday’s closing price of approximately 56 baht per share, but
shareholders will have to pay 35% tax themselves. As for the purchase of INTUCH shares, we will have to wait for the results of the INTUCH shareholders’ meeting first. Initially, I am ready to purchase only one person, but we have to look at the closing price as well. However, the purchase of such shares is in accordance with the law,’ said Mr. Sarath.
Mr. Sarath said that in the second round of renewable energy purchase of another 3,668 megawatts, the Gulf Group still has a joint venture with partners who have already proposed the project, expecting to receive no less than 20% of the purchase offer. As for the purchase of renewable energy electricity via the Direct PPA system of 2,000 megawatts, it is likely to be difficult to happen because renewable energy can produce electricity for 8 hours. The rest must be purchased from the system. Therefore, it is expected that purchasing from the system from the Electricity Generating Authority of Thailand (EGAT) will have a lower cost and will not create a burden o
n the cost of transmission lines and backup systems for the public. As for the import of LNG, the group has already started importing it and will import another 40-50 ships next year at a very low price, resulting in lower overall costs and still being confident that gas will be the main fuel for electricity generation for a long time.
Mr. Sarath also mentioned the proposal to establish a branchless bank (Virtual Bank), saying that the group has strong partners, both Krungthai and OR, so he is confident that it will proceed according to the conditions of the Bank of Thailand without any problems, which will require tens of billions of baht in capital. The fact that the Ministry of Finance wants to open more than 3 services is something that the government will consider.
Krungsri Securities stated in its analysis that Intouch Holdings PCL (INTUCH) recommends buying with a target price of 105 baht. Although the share price has surged in the past 2-3 months, it maintains its buy recommendation and increases th
e target price to 105 baht (5% discount to ADVANC’s NAV) from 98 baht. Investing in INTUCH at this price will allow investors to not only receive strong earnings per share in Q3/67 and have upside, but also receive a high Dividend Per Share (DPS) of at least 6 baht in the event that the shareholders’ meeting approves the merger with GULF. Even without an upgrade of EPS, the dividend yield at this price is still high at 6%.
Source: Thai News Agency