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.

“After achieving great success as the No 1 in news, Nation TV will go beyond a news station. The next chapter is that we must be news plus world-class edutainment,” Adisak Limparungpatanakij, president and chief executive officer of Nation Broadcasting Corporation (NBC), the operator of Nation TV, said yesterday.

The move was part of the celebration of the 16th anniversary of this 24-hour news station.

Nation TV wants to expand its viewer base by adding a line-up of world-class documentaries, films, variety shows and travel and lifestyle programmes to attract new audiences on top of those who enjoy getting updated news and comprehensive and in-depth analysis from Nation TV’s professionals.

According to a study by the National Broadcasting and Telecommunications Commission, high-purchasing-power customers are big fans of news stations. Nation TV was recognised by those consumers as their top choice for catching the latest goings-on.

Heading the new line-up are “Nova”, a popular and award-winning science documentary series from the Public Broadcasting Service (PBS) network in the United States, and the “Frontline” documentary series.

“We are delighted to screen those top-rated documentaries, which are relevant to Nation TV’s core values,” Adisak said.

“In the near future, we will invite the executive producers of those documentaries to share their thoughts and knowledge with our teams and also our valued audience.”

The company has also joined forces with leading content distributors Hollywood Thailand and Documentary Club to bring world-class and award-winning documentary films to be aired on Nation TV.

This starts with “A Matter of Taste” directed by New Zealand-born Sally Rowe. The documentary follows the career of talented chef Paul Liebrandt over the course of a decade in New York City.

To appeal to entertainment addicts, strategic partners like MVTV Thailand will provide Chinese films and variety shows, JKN Global Media will distribute Indian and US TV programmes and Rose Entertainment Corporation will offer Japanese TV shows. The travel show “The Passion” will also air soon.

“With this TV revamp, Nation TV aims to rank among the top 10 digital TV stations by the end of this year,” Adisak said.

“We are still confident that operation by the existing company will bode well for the continuity [of petroleum production].”

“But there are many conditions to consider,” PTTEP president and chief executive officer Somporn Vongvuthipornchai said when asked if his company would also bid for the Erawan block, currently operated by Chevron.

The National Energy Policy Council chaired by Prime Minister Prayut Chan-o-cha resolved on Monday for the government to put to bid the two major petroleum blocks whose concessions will expire in 2022-2023.

The Erawan and Bongkot gas fields have combined production of 2.2 billion cubic feet per day, or 76 per cent of the output in the Gulf of Thailand. Direct negotiations will be held with Chevron and PTTEP if there are no interested bidders.

PTTEP holds a 44.445-per-cent stake in the Bongkot block, with the balance held by Total E&P Thailand (33.33 per cent) and BG Asia Pacific (22.22 per cent). Bongkot is 203 kilometres off the Songkhla coast in the Gulf of Thailand.

Somporn said PTTEP had prepared for the auction and would give importance to production continuity to ensure energy security for the nation, or, if there were a discontinuity in production, to minimise its impacts.

Asked if PTTEP would cut its investment and production if it does not win the right to continue operating the Bongkot block, Somporn said the company had been obliged by contracts with gas buyer PTT to a minimum production volume of about 850 million cubic feet per day. But according to its current capital-investment plan, its output will be lowered during the last few years of the concession.

“The government is considering ways to minimise the impact [if existing operators fail to win the auction].

“We’ll wait to see what the mechanism will be. The easiest way is to import LNG,” liquefied natural gas, to cushion any shortfall of domestic gas supply, he said.

Somporn said PTTEP was waiting to hear the terms and conditions for the bid and would be ready to join regardless of the fiscal-regime options.

“As we [have said before], we don’t mind if it is a production-sharing or concession regime, but the concession system would be better for continuity, since we are familiar with this system and the government already has an administrative system in place,” he said.

Energy Minister Anantaporn Kanjanarat said the benefits returned to the state from the upcoming petroleum auction that would he organised within a year must not be lower than the current terms stipulated under the so-called Thailand III fiscal regime.

Somporn said the government could mean that it would expect more favourable terms, but given the current oil price slump, the amount of money it gets will not necessary be the same.

PTTEP executive vice president Suchitra Suwansinpan said the LNG price in the spot market was currently about US$5-$6 per million British thermal units, cheaper than the average price of gas or the so-called gas-pool price in Thailand, but gas from spot market is not always available.Under Thailand’s current fiscal terms (Thai III), the country operates a concession regime, consisting of a sliding scale royalty paid to the government based on production, a specified (50%) petroleum income tax applied to profits, and a special-remuneratory-benefit windfall profit tax. According to a study conducted in 2014 by Wood Mackenzie, a consultant for the oil & gas and mining industry, based on a 250 billion cubic feet (bcf) gas field in shallow water (less than 400 metres) in a medium cost environment – a standard field-type for offshore Thailand – Thailand’s government takes a 67percent share of oil and gas profits under current terms. This exceeds the global average share of 58%.

The source told The Nation on condition of anonymity that CTH, the country’s second-largest pay-TV operator, failed to reach a sub-licence agreement with BeIN Sports to continue live broadcasts in Thailand, Cambodia and Laos of the top-rated English soccer league for the coming seasons.

Both CTH and TrueVisions Group were invited to bid for sub-licensing contracts from BeIN Sports, which recently secured audio and visual broadcasting rights to EPL matches for three seasons starting this year. Each season, 380 matches can be telecast live.

The source said CTH could not accept the conditions presented by the rights holder, as the cost had risen by 50 per cent from what CTH paid in a previous deal for these same broadcasting rights – although CTH would also have secured broadcasting rights to other major sport events via BeIN Sports channels.

Previously, BeIN Sports, an affiliate of Al Jazeera news agency, reportedly offered the EPL about US$250 million (Bt8.9 billion) to clinch the deal over the two bids from Thailand – CTH and TrueVisions.

The source said that even though BeIN Sports offered CTH a non-exclusive deal covering the English

soccer league and Spanish La Liga and other top-ranked sport tournaments through its channels, CTH finally declined to accept the offer.

“Compared with Fox International Channels, the Qatari media company’s deal

appears to be more costly because BeIN Sport focuses only on sport-oriented live programmes, while Fox has many thing to offer ranging from sports to entertainment and lifestyle programmes,” the source added.

In a previous interview, Sueksith Cholasuek, marketing director of TrueVisions Group, said his company’s negotiations with BeIN Sports to broadcast live EPL matches were in the final stages. If a deal were concluded, the matches might air via BeIN Sports channels 1-4, but with the large number of live matches per season, there might be an additional channel as well.

However, so far there is no confirmation on whether TrueVisions has clinched a deal, exclusive or non-exclusive, with BeIN Sports to broadcast EPL matches.

Chaiyarit Anuchitworawong, executive vice president for international banking, told The Nation that BBL’s experience of doing business in other countries where it has a footprint had been different than in Myanmar, because those countries’ economies had not been isolated for a long time.

“We can acquire information from other countries and do what other foreign businesses did. In Myanmar, even if we can understand the regulations [written in Burmese script], we are not sure what we are able to do, such as seizing collateral from borrowers if they default,” he said.

Legal process

“As a foreign bank, we have worried over how long the legal process is before we can seize collateral from borrowers. The bank used to ask a local law firm, but it was also not sure if the bank could sue defaulting borrowers or not.

“Local law firms sometimes are confused by what we ask them because they don’t have much experience in solving such problems. The bank therefore has to more cautious in the lending process, making sure enough time is spent on assessing creditworthiness,” he said.

Before Myanmar opened up its economy, there were few foreign companies doing business there, so the bank doesn’t have examples of how obstructions are resolved, unlike in other countries where it has been able to learn how to deal with barriers to doing business. Myanmar is therefore a bigger challenge than the other 14 markets where BBL has footprints. However, the authorities are aware of this and are attempting to make clearer regulations to improve the ease of doing business, Chaiyarit said.

According to the World Bank’s “Doing Business 2016” data, Myanmar’s ease-of-doing-business ranking is 167 out of 189 economies. The ranking improved from No 177 in “Doing Business 2015” data.

Chaiyarit said that even though Myanmar was posing a lot of challenges, the bank had found a lot of opportunities as well.

“We are happy with our performance in Myanmar because we began from zero, and therefore we can grow a lot in all transactions included lending. We have set credit lines for several foreign clients that are actively doing business in Myanmar,” he said.

The bank is in talks with many foreign investors including Thai corporates because after opening its economy, Myanmar is investing a lot in infrastructure and utilities to serve the massive business inflows, he said.

Apart from greater consumption of its 60 million people and rich resources that attract investment, the government requires investment in power plants and telecommunications towers, both of which are the focus of Thai companies.

Having a branch in Myanmar enables BBL to service Thai customers and multinationals from Taiwan, mainland China and Hong Kong that have been referred from the bank’s branches in those markets.

Non-Thai companies are running manufacturing and other businesses that have concession contracts from the government, such as utilities and ports, he said.

Chaiyarit said having a representative office for 19 years, even though it could not conduct financial transactions, was an asset, as it was able to collect data and assist bank executives and clients who wanted to explore opportunities in Myanmar.

Those data also helped BBL to assess what were opportunities and what were risks.

NBTC secretary-general Takorn Tantasith said the regulator’s telecom committee had decided yesterday to fine the company this amount.

It had already confiscated Bt644 million that the company placed with the committee before the auction of two 900MHz licences last December.

The final fine is higher than Bt131 million proposed by the NBTC panel assigned to seek damages from JASMBB, a subsidiary of Jasmine International.

“The company has to pay us within 15 days, by June 16. It can appeal against the fine, if it does not agree with the figure,” Takorn said, adding that the case might end up in the civil court.

A representative of JASMBB yesterday picked up the penalty letter from the NBTC’s office.

Takorn said the Bt199.423-million fine comprised three parts.

The calculation of the first element, Bt20.24 million, is based on the Bt80-million cost of the regulator holding the 900MHz licences last December, divided into four as there were four bidders.

The second part, Bt10 million, |is the cost of the re-auction of the forfeited 900MHz licence on May 27.

The final element – Bt169.175 million – is made up of Bt1.675 |million per day for the company’s failure to pay the first instalment of the licence upfront fee of Bt8.04 billion.

The calculation is based on 7.5-per-cent interest charged on the Bt8.04 billion from March 22 until June 30.

June 30 is the date the new winner of the 900MHz licence, Advanced Wireless Network, is expected to pay the first instalment of the licence upfront fee, ahead of the deadline of August 24, he explained.

If Advanced Wireless Network pays the fee on any other date, calculation of this part of the penalty will cease on that day.

Takorn added that, once it was paid, the NBTC would transfer the penalty sum in full to the state |coffers.