Napapon Chirakul, the Bangkok Metropolitan Council member from the Bangkok Noi District and Chairman of the Ad Hoc Committee on the Additional Expenditure Budget for Fiscal Year 2025, revealed progress in considering the settlement of debts owed to Bangkok Mass Transit System Public Company Limited (BTSC), part of BTS Group Holdings Public Company Limited (SET: BTS).
The committee concluded that Bangkok should proceed following city regulations to settle the operations and maintenance (O&M) charge in the second lawsuit amounting to approximately THB 12 billion.
The Ad Hoc Committee has finalized its meeting report and will urgently submit it to the Bangkok Council President, aiming to convene the extra session of the Bangkok Council this week.
The council’s approval process is expected to conclude by the last week of March, after which the Bangkok Governor will announce it in the Royal Gazette to proceed with the payment to BTSC.
The payment is initially expected to come from Bangkok’s budget reserves, currently standing at about THB 30 billion, to settle the second lawsuit. However, the final decision on fund allocation will depend on the Governor’s discretion.
Mr. Surapong Laoha-Unya, Managing Director of BTSC, stated to “Kaohoon” that the company is ready to negotiate with the Bangkok Metropolitan Administration if there is a clear intention to settle all overdue O&M debts for the Green Line extensions, which total more than THB 30 billion.
Deputy Prime Minister and Minister of Transport, Suriya Jungrungreangkit, provided updates on the extended Pink Line project between Si Rat Station and Muang Thong Thani, consisting of two stations over three kilometers. As of the end of January 2025, the project’s overall progress stands at 85.97%, with civil work at 87.88% and system work at 82.22%, ahead of schedule by 2.17%.
The line is expected to enter trial runs by the end of May 2025, with free public trials by the end of June, and full service commencing on July 19, 2025, with fares between THB 15-22. The line will join the THB 20 flat-fare initiative by September 2025.
Korapat Worachet, Assistant Managing Director and Head of Research at Krungsri Securities, views the potential debt settlement of THB 12 billion positively for BTS’ stock. It would enhance the company’s cash flow and borrowing capacity after a reduction in debt-to-equity (D/E) ratio.
Additionally, the company’s joint ticket project, if proceeding as planned, will help mitigate losses from the Pink and Yellow Line projects due to government compensation of THB 20 throughout the journey. The recommendation is a “Buy” with a target price of THB 6.40.
Phillip Securities (Thailand) mentions that post-debt settlement, BTS will benefit from improved cash flow and plans to use the funds to repay financial institution debts to reduce interest burdens, thus enhancing overall operational conditions.
Discussions with BTS executives indicate that full debt settlement of THB 30 billion from Bangkok will lower the D/E ratio from the current 1.16 to 0.89 times.
Tisco Securities Company Limited values BTS at an adjusted THB 6.20, revising profit estimations to reflect structural adjustments within the group (BTS capital increase via RO, consolidated financials of Rabbit Holdings Public Company Limited (SET: RABBIT) and Roctec Global Public Company Limited (SET: ROCTEC), and reduced VGI holding post-recent capital increase via PP). Hence, the suitable valuation adjusts from THB 5.50 to THB 6.20.
