The Energy Regulatory Commission (ERC) of Thailand has blocked PTT’s proposal to acquire a stake of 69.1% in Glow Energy from Engie for €2.6bn, owing to competition concerns.
PTT, which is 51% owned by the Thai government, entered into the deal with Engie in June 2018, to buy the majority stake in Glow Energy through its power subsidiary Global Power Synergy.
ERC, in a statement, said: “The acquisition would have led to a monopoly in some industrial areas and therefore it is considered to reduce competition.”
In September, Thailand’s former Finance Minister wrote a letter to Prime Minister Prayuth Chan-ocha seeking an investigation into the deal by the ERC, reported Reuters.
According to the publication, Global Power Synergy will not make the tender offer for the stake acquisition in Glow Energy, which has a total power generation capacity of 3.2GW, made up of 1GW of coal, 2GW of gas and 0.2GW of renewable energy.
Engie would have offloaded all its coal-fired assets in Asia-Pacific had it completed the sale of its stake in Glow Energy. Further, it would have helped the French energy company in reducing its coal-fired generation installed capacity across the world by 14%.
The transaction is expected to result in a reduction of €3.3bn of the consolidated net debt of Engie.
The French company said that it will assess the ERC decision and that it has other options in place for selling its stake in Glow Energy.
Comprised of a group of energy companies, Glow Energy’s business has two main divisions in Independent Power Producer (IPP) and Cogeneration.
The utility’s IPP business sells power to the Electricity Generating Authority of Thailand (EGAT) under Thailand’s Independent Power Producer (IPP) program, to the Provincial Electricity Authority under Very Small Power Producer (VSPP) program, and also to Electricite du Laos (EDL).
Its gas and coal-fired IPP plants in Thailand are located across Chonburi and Rayong provinces. Glow Energy also has a solar power plant in Rayong in addition to a hydro IPP plant located at Lao People’s Democratic Republic.
Its cogeneration business provides power under the Small Power Producer (SPP) program to EGAT apart from serving industrial customers with electricity, steam, clarified, demineralized and chilled water.