Photographer: Dimas Ardian/Bloomberg
Energy Tycoon to Pour $4.6 Billion Into Southeast Asia BoomBy
Sarath Ratanavadi’s Gulf Energy plans to add power plants
Gulf’s IPO is turning Sarath into newest Thai billionaire
Gulf Energy Development Pcl’s billionaire founder Sarath Ratanavadi plans 150 billion baht ($4.6 billion) of investment in power plants over the next four years after the company’s listing this month.
The initial public offering’s proceeds will help fund some of the outlay, with the rest coming from loans, Sarath, the company’s chief executive officer, said in an interview in his Bangkok office. His net worth is about $2.2 billion based on Gulf Energy’s $733 million IPO, according to the Bloomberg Billionaires Index.
"Gulf Energy will have stronger financial leverage for more expansion following the IPO, as new power plants require a large amount of money,” Sarath said on Friday. “The company is looking at a number of opportunities in Thailand and neighboring countries.”
The firm is studying projects in such countries as Myanmar, Laos and Vietnam, where faster economic growth will boost demand for electricity, he said. Southeast Asian nations are enjoying an economic boom, spurred by a global recovery that’s buoying exports.
Sarath said the investment plan will focus on gas-fired electricity and probably cover acquisitions of existing power plants and green-field projects. Gulf Energy generates almost all of its power from natural gas and will double output to 4,647 megawatts by 2024, according to a filing.
Coal faces regulatory curbs due to pollution and returns on renewable energy are comparatively low, Sarath said. Such risks underscore the need for measured expansion, he added.
The IPO is the largest first-time share sale in Thailand since Jasmine Broadband Internet Infrastructure Fund priced a $1.7 billion offering in 2015, according to data compiled by Bloomberg. It adds to the $2.5 billion of first-time share sales in the country this year, up from $1.5 billion during the same period in 2016, the data show.
Thailand is set for a “strong recovery” after years of slow economic growth, Sarath said, adding that industrial customers have boosted demand for electricity, steam and other supplies.