SET next stop for BTSC

Construction News

Purple Line victory to call for more funds

Bangkok Mass Transit System Plc (BTSC), part of the SET-listed BTS Group Holdings (BTS), may consider listing on the Stock Exchange of Thailand if the SkyTrain operator wins the bid for the 20-billion-baht operating and maintenance contracts of the Purple Line.

BTS will join a race of over 10 in bidding for the 23-kilometre elevated rail project, which is expected to tender on Feb 24, said chief operating officer Surapong Lao-ha Unya.

Another potential bidder is SET-listed Bangkok Metro Plc (BMCL), which operates the capital’s 20-km subway train.

“If we win the contracts (to operate the Purple line), we will consider options to finance the projects such as mobilising funds from the stock market, increasing our registered capital and seeking bank loans,” said Mr Surapong, who is also a director of BTS.

The investment cost, including the purchase of 25 three-car trains, is approximately 20 billion baht. BTSC might look at partners to jointly invest in the projects, such as suppliers of trains from Japan and China, he added.

The SkyTrain operator is now part of BTS, which is controlled by the group’s founder and chairman Keeree Kanjanapas. Tanayong Plc (TYONG), formerly a SET-listed property developer that was also founded by Mr Keeree, acquired the assets of BTSC in a share-swap deal and renamed itself BTS Holdings.

The SkyTrain operator generates 60% of BTS’s revenue, with the rest coming from property and other businesses.

Mr Surapong added the BTSC expected its revenue and ridership to grow by at least 10% in fiscal year 2012 starting in April this year.

In the 2010 calendar year, the company met its target of 5% ridership growth to an average of 480,000 passengers on weekdays but missed the 8% projection of revenue growth because of political unrest in April and May that forced temporary shutdowns and shorter service hours on the rail line.

“Our business is expected to gain more riders as new condominium projects along the line are completing construction and are about to open. Meanwhile, the 5.2-km On Nut-Baring extension, to be operated in August, will also push ridership to rise further by about 50,000 per day,” said Mr Surapong.

BTSC also hopes to join the bid for the Green Line extension from Baring to Samut Prakan and for four light rail projects planned by the Bangkok Metropolitan Administration, he said.

Meanwhile, the company plans to raise the fare ceiling for the SkyTrain from the current 40 baht to 45 baht. The rate has not been increased during the past 10 years of operations even though an increase is allowed under the concession, he acknowledged.

BTSC is also expecting the Treasury Department’s compensation payment of more than one billion baht following an order by the Administrative Court late last year.

The department, under the Finance Ministry, filed an appeal to the Supreme Administrative Court to reverse the court’s order.

Daowadee Teera-apisakkul, a senior analyst at Kim Eng Securities, said BTSC would draw huge interest from stock investors if it floated shares on the SET.

Currently, the SkyTrain is the profit centre for BTS Holding, whose financial results are brought down by the loss-making Tanayong, she added.

Shares of BTS closed yesterday on the Stock Exchange of Thailand at 0.73 baht, unchanged, in trade worth 48.8 million baht.


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