Banpu Public Company Limited (BANPU) Sees Stock Price Rise After BKV Corporation Announces IPO

BANPU’s stock price increased by 4.80% after its subsidiary, BKV Corporation, announced an initial public offering (IPO) of 15 million shares on the New York Stock Exchange (NYSE).

Asia Plus Securities believes that BKV’s listing on the NYSE will not affect fundamental estimates, as it is part of the process of raising funds to repay debt. However, it may create a short-term buzz that will stimulate the stock prices of parent companies like BANPU.

BANPU’s stock price movement was 6.55 baht plus 0.30 baht or 4.80% during the day, with a trading value of 1,364.65 million baht.

BKV Corporation’s IPO Details

BKV Corporation, a subsidiary of BANPU, has announced an initial public offering of 15 million shares on the NYSE, with an initial offering price range of $19-21 per share. The company plans to use the proceeds from this fundraising mainly to repay existing loan debt and invest in CCUS (Carbon Capture) projects.

BKV has filed for listing on the NYSE since November 2022, and the IPO is part of BANPU’s plan to raise funds to repay loans and expand investment for further growth.

After the completion of the IPO, BANPU’s stake in BKV will be reduced to approximately 74-76%.

BKV’s main assets include natural gas business, power plants, CCUS, and others.

BKV Corporation’s Operating Results

For the first half of 2024, BKV’s operating results showed a net loss of $98.3 million. However, the company’s operating results for 2023 were a net profit of $116.9 million, down from $410.1 million in 2022.

At the end of Q2/67, BKV’s asset value was $2.2 billion. Although the current price of natural gas is close to the break-even point, the long-term picture is expected to show progress in both winter seasons and the general economy in the United States.

This will help support the gas business and power station, bringing BKV’s overall operating results back to profit.