Thai court rejects bid to delist energy giant PTT

BANGKOK (Reuters) - A top Thai court threw out a lawsuit by anti-privatization activists trying to delist $34 billion energy giant PTT PCL PTT.BK, but said on Friday it had to return its gas pipelines and some land to the government.

The court "dismissed the complaints, which means the privatization law of PTT will not be revoked", Chief Judge Charan Hathagam said as he read out the verdict of the five-member panel.

But in the course of a two-hour reading of its verdict on the suit against the largest company on the Bangkok bourse, the Supreme Administrative Court said the pipelines and the land on which they were built were national assets.

"The court orders defendants to return the assets to the Ministry of Finance before the establishment of a regulator" for the energy business, now pending, Charan said.

Analysts said the loss of PTT's pipelines, worth about 10 billion baht ($300 million), would dent PTT earnings as the business accounted for 10-15 percent of the group's profits.

"What used to be a profit for PTT will become a cost. Obviously, this is going to weigh on its earnings and share valuations," Kasikorn Securities head of research Kavee Chukijkasem said.

PTT shares were suspended ahead of the verdict and due to remain so until the firm spelt out how the pipelines would be returned to the government. They were expected to fall when trade resumed due to the cost of leasing back the pipelines, analysts said. The stock closed at 368 baht on Thursday.

Uncertainty about the ruling had weighed on the share price, knocking the stock 3.2 percent lower this month, although it remains up 75 percent so far this year.

"The impact is somewhat discounted in the share prices already," Asia Plus Securities chief executive Kongkiat Opaswongkarn said.

"But of course, there'll be some impact on PTT's profit, although at this point we don't know how much it's going to hit earnings."

The suit charged that when PTT was floated on the stock market in 2001, then Prime Minister Thaksin Shinawatra gave political backers and cabinet members priority access to subscribe to most of PTT's share offer priced at 35 baht each.

The court said there was no evidence to back up the charge.

The Supreme Administrative Court also dismissed charges by the anti-privatization activists that there had been insufficient public hearings prior to the float of PTT and that those on a flotation advisory panel had been appointed illegally.

State-controlled PTT raised $833 million in an initial public offer in a partial privatization as the then new government of Prime Minister Thaksin Shinawatra, ousted in a bloodless 2006 coup, made such sell-offs a major policy.

The Finance Ministry still owns 52 percent of what is Thailand's top oil and gas firm.

In addition to its gas pipeline monopoly, now to end, it has more than 30 petroleum, gas exploration, refining and petrochemical businesses.

(Additional reporting by Bangkok Bureau, editing by Michael Battye & Jan Dahinten)