BANGKOK, Aug 31 (Reuters) - Exxon and Chevron are under pressure from Thailand's military-appointed government to make good on a pledge made 15 years ago to float shares in their local oil refineries in Bangkok next year.
Esso (Thailand), a unit of Exxon Mobil Corp
"We want the filings done within this government. They are trying to postpone until the next government, which will open a chance for them to keep delaying," Piyasvasti told Reuters ahead of a general election set for Dec. 23.
The government is trying to lure high-profile companies to the Bangkok stock market, but many investors are wary about Thailand after last year's military coup, making firms timid about jumping into the stock market to raise capital.
The latest drive for a listing comes just as global equity markets are shaken by fears about U.S. subprime lending.
The government thinks the two listings could add up to 60 billion baht ($1.75 billion) to the Thai stock market.
"We want Thais to own the refineries and it's a condition that should benefit the stock market by having more good stocks," Piyasvasti said.
Listing was a condition of the 1991-92 deals which allowed Esso and SPRC to build refineries in Thailand. They are the only two of Thailand's seven refiners which have yet to list. Failure to do so could mean losing their licence to operate.
"The government can terminate the contracts and they won't have the right to operate a refinery business in Thailand. I think they're aware of this and are starting to be serious and speed up the process," he said.
"The previous governments did not push on this. Under the agreement, the energy ministry has to get it done."
ESSO IN TALKS
Many listing plans were derailed when the 1997-98 Asian financial crisis pulled the plug on demand and put refineries into debt.
Top refiner Thai Oil
Esso is still saddled with debt and has piled up accumulated losses, putting it in breach of listing requirements.
Piyasvasti said Exxon had given its Thai unit, which runs a refinery with capacity of 170,000 barrels per day, the go-ahead to refinance 20 billion baht ($583 million) before going public.
The finance ministry, which owns 12.5 percent of Esso, would also inject more than 2 billion baht, Piyasvasti said.
"We are working with the government. But I can't give any details now," Esso director Mongkolnimit Auacherdkul said.
The firm has appointed Morgan Stanley
THOSE DEVILISH DETAILS
SPRC's flotation is embroiled in protracted negotiations between Chevron, which owns 64 percent, and state-controlled PTT PCL
"Neither firm wants to list," said a financial source. "It's normal they don't want to have too many shareholders and sacrifice some sensitive information for tax benefits."
PTT has stakes in five refineries and wants to dilute its holding in SPRC to 25 percent. It talked to Chevron about merging SPRC with its Rayong Refinery
It has said listing SPRC could raise about 20 billion baht.
"They talk in preparation to list whenever market sentiment is favourable," said a banker close to the deal. "It's clear PTT wants an exit, but that relies on Chevron's decision. The devil will be in the detail." ($1=34.35 Baht)