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Allen & Overy advises on landmark liability management exercise and new issues for leading Thai petroleum company

 

24 August 2017

Allen & Overy has advised Bank of America Merrill Lynch (BofA Merrill), BNP Paribas and Citigroup in a landmark liability management transaction by PTT Exploration and Production Public Company Limited (PTTEP), Thailand’s leading petroleum exploration and production company.

The transaction allows PTT to take advantage of new regulations in Thailand to deliver significant tax benefits. It is the first transactions of its kind in Thailand, paving the way for similar deals in the future.
 
As part of a liability management strategy designed to reduce its funding costs, PTTEP offered to repurchase USD1 billion of its hybrid securities from investors. This was achieved through a highly innovative structure involving a consent solicitation and two cash tender offers, as regulatory constraints prevented the company from conducting a direct exchange offer for the hybrids.
 
Concurrently, the PTTEP group offered, via a wholly owned subsidiary of PTTEP acting as a “treasury center”, two new series of hybrids valued at USD500 million and USD355 million respectively, one of which was substantially identical to the repurchased original hybrids.  These new issues, which were made pursuant to Rule 144A and Regulation S, preserved PTTEP’s capital structure and helped to achieve the company’s commercial objectives.
 
Commenting on the transaction, partner Amit Singh said: “We are delighted to have been a part of this ground-breaking Thai transaction. We continue to advise on some of the most complex and interesting capital markets transactions in ASEAN and South Asia, and it is immensely satisfying to have assisted our clients to allow PTTEP to lower its funding costs and achieve certain key commercial objectives. The structure and mechanics of this offering is likely to be of significant interest to other issuers from Thailand.”
 
The Allen & Overy team was led by partners Amit Singh and Suparerk Auychai, who were assisted by counsel Anchalee Limviriyalers, senior associate Felipe Duque, associates Husayn Reza, Peerajit Chanmolee and Bryna Djuhar and trainee solicitor Raashi Mukherji.
 
For further information please contact Nadine Gibbon, nadine.gibbon@allenovery.com, on +852 2974 7090.
 

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