17 June 1996 00:00 [Source: ACN]
THE implementation of the proposed merger between Thailand's National Petrochemical Co (NPC) and Thai Olefin Co (TOC) is likely to begin next year, contrary to earlier reports that the move will be completed this year.
Government sources said a decision on whether or not to merge the two companies will be made this September at the earliest.
The Petroleum Authority of Thailand (PTT), which is initiating the proposed merger, has appointed independent consultants to assess and evaluate the financial assets of the two companies.
'This is the crucial part of the proposed merger,' a PTT source told ACN.
The decision to merge will be based on the report by independent consultants. said sources. They said an assessment of TOC's assets will determine how much NPC shareholders will have to pay to acquire TOC.
A preliminary study concluded last month on the proposed merger has decided that the acquisition of TOC by NPC is the most feasible way to implement the merger, senior government sources told ACN.
The second phase of the study is tentatively due in September. Sources said implementation of the merger - if the decision to merge pushes through - can only begin next year.
Sources added that the decision to merge will be made by minority shareholders of NPC and TOC. PTT, as majority shareholder in both NPC and TOC, is not qualified to vote on the proposal. PTT holds a 49% equity stake in TOC and 38% in NPC.
PTT sources said the concluding date for the study will depend on whether or not the consultants decide to use the information provided by PTT on NPC and TOC.
A source said that if the consultants decide to use PTT's data, the valuation process should take only a month. But if they decide to gather their own data, the study could take three months.
'The two groups of consultants will also have to agree on their findings. If there is some disagreement on the evaluation of assets, then it is unlikely that any proposal to merge could be made,' said a PTT source.
Local securities firm Fin-One and United Bank of Switzerland have been selected as financial advisers for NPC. TOC's advisers are Securities One and SCB Advisory. a subsidiary of Siam Commercial Bank.
A PTT source said a foreign financial adviser may also be brought in for TOC but declined to name the firm as negotiations are still being conducted.
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