Prima Marine Plc (PRM), Thailand's largest shipping company for liquid petroleum and petrochemical products, expects funds raised from its listing plan on the Stock Exchange of Thailand could help double the size of its fleet.
Chief executive Chanwit Anakkul said PRM plans capital expenditure (capex) of 15 billion baht from this year to 2019, partly raised from its IPO programme.
He said the marine liquid cargo service in Thailand has strong potential, particularly crude oil and petrochemical products.
Mr Chanwit said the company filed the listing process to the Securities and Exchange Commission of Thailand several months ago. However, he declined to get into specifics about how much he hopes to raise from the IPO.
Thai marine logistics have a small market share in Thailand as most liquid cargo services are provided by foreign companies.
The company plans to expand after the launch of the IPO by increasing the number of vessels in its fleet to almost 40 units, up from 22 now.
Manpong Senanarong, a managing director of Kasikorn Securities Plc who is a financial adviser to the PRM, said the company has not exceeded the 650 million shares to be offered in the IPO and it is now in the process of book-building.
PRM is the largest integrated service provider in Thailand for the transport and storage of liquid petroleum and petrochemicals from exploration and production (E&P) to the downstream industry.
"It is a company with strength in floating storage units (FSU) and marine management expertise as well as human resources with strong marine knowledge," said Mr Manpong.
Executive vice-president of Siam Commercial Bank Plc's primary distribution division Veena Lertnimitr said cash raised from the IPO will go into buying new vessels to expand the company's transport fleet from the floating storage unit and offshore vessel businesses.
The rest of the cash from the IPO would go into working capital and repaying loans.
As of April this year, PRM and its subsidiaries have a fleet of 22 ships with a total tonnage of 2,219,002 DWT (dead weight tonnage). This excludes its business partners, which own 13 vessels with a total tonnage of 251,183DWT.
PRM has reported plans to expand the fleet during 2017-2019, including nine transport vessels of between 3,000-10,000DWT each, with a projected cost of 2.34 billion baht.
It also set aside another 6.9 billion baht of capex for another 11 large transport vessels, comprising a 14,000DWT ship, from a medium range vessel to a large crude carrier. The project would help increase its transport volume by another 16,700 million litres per year.
The company also plans to purchase another two FSU units worth around 1.1 billion baht to serve its Thai oil exploration and production business. "These investment plans are for improving the potential of the company in marine transport in Southeast Asia," said Mr Chanwit.
PRM has grown from a small unit of marine service under the Nathalin Group since 1980s, mostly providing marine transport for PTT and its subsidiaries.
It previously planned to list in the stock market in Hong Kong and Singapore but finally decided to list in the SET.