PTT has hired JPMorgan Chase & Co and Phatra Securities to advise it on the potential initial public offering, people familiar with the matter said. The sources declined to be identified as the information was not yet public.

Kasikorn Securities, the brokerage unit of Kasikornbank, has also been hired as an adviser, a Kasikorn official said.

Last month, PTT invited brokerages to make pitches and then selected the above three to work on the IPO, the sources said.

PTT’s retail division may be valued between US$2 billion and $3 billion (about Bt70 billion to Bt105 billion), they said. One of the proposals being considered is bringing in a strategic partner before the likely IPO next year, they added.

A successful listing would rank among Thailand’s largest IPOs. BTS Group’s $2.13-billion IPO holds the current record.

PTT, like other global energy companies hit by slumping oil prices, is trying to find new ways to fund its capital-spending needs. It plans to invest Bt297 billion in the 2016-20 period, of which Bt50.8 billion is earmarked for this year.

It is also catching up with the global trend that has seen a series of oil companies selling their low-margin fuel-marketing businesses.

Convenience store model

PTT has 1,458 outlets, representing 40 per cent of Thailand’s petrol-station market. The company has said it plans to invest Bt20 billion over the next five years to expand its service-station network to 1,600.

The planned IPO would consist of the fuel-marketing business and PTT-owned Amazon coffee shops at the petrol stations, the official said.

PTT shares extended gains to trade up 2.3 per cent after Reuters first reported that the company was studying a possible IPO, while the SET Index was up 0.7 per cent.

Unlike in Western markets, where non-fuel businesses – convenience stores, fast-food operations, and services such as car washing – can account for more than half of a petrol station’s profits, the majority of PTT’s profits comes from fuel sales.

By spinning off the business and introducing a strategic partner, PTT is hoping it can help boost the share of non-fuel business and improve its overall profit margin. Such a deal would boost the value of the low-margin marketing business, bolster the group’s finances and free up funds for investment in exploration and production.

PTT has previously raised the prospects of a retail IPO, but this is the first time it has hired banks to undertake a detailed study, underscoring the seriousness of its intent.