UPDATE 2-Exxon Thai unit to raise $350 mln from IPO

(For IPO news, data and diary, click <TH/IPOMENU) (Recasts with IPO price confirmation, adds details)

By Saranya Suksomkij and Wirat Buranakanokthanasan

BANGKOK, April 23 (Reuters) - Esso (Thailand), a unit of Exxon Mobil Corp (XOM.N), will raise 11 billion baht ($350 million) in the country's largest IPO so far this year, in what is expected to be a busy year for fund raising in Thailand.

The company has priced its IPO price at 10 baht ($0.318) a share, near the lower end of an indicative range of 9.0-13.0 baht, Anuwat Ruamsuke, director at underwriter Phatra Securities PHAT.BK, told Reuters on Wednesday.

"After a book-building, investors have expressed interest in buying shares much more than the number offered," Anuwat said. The IPO from Esso (Thailand), 87.5 percent owned by Exxon Mobil, is due later this month.

The price values Esso at 5.7 times its estimated 2008 earnings, compared with 7.5 times for top refiner Thai Oil (TOP.BK) and 7.2 times for PTT Aromatics and Refining PTTAR.BK, according to Reuters' data.

Esso is offering 1.1 billion shares, of which 326.25 million come from the Finance Ministry, to local and foreign investors.

Esso's IPO comes at a time global oil prices have surged to records near $120 a barrel due to the weaker dollar, export disruptions from Nigerian rebel attacks and production concerns.

Surging oil prices helped boost Esso's earnings 348 percent in 2007, but analysts expect earnings to drop this year as the industry takes a hit wnward cycle in the second half of 2008 when new capacities enter the market.

Last month, the chief of Thailand's stock exchange said it hoped for 50 initial public offerings worth at least 300 billion baht this year on signs of renewed confidence in the local economy. [ID:nBKK198619]

Phatra said Esso would exercise a "greenshoe" option to sell an additional 84.58 million shares to the public after shares offered to the retail tranche were three times oversubscribed on the first day of subscription on Monday.

Including the greenshoe option, the firm will raise about 11.8 billion baht. Most of the proceeds from the share sale will be used to repay debt, which should reduce Esso's debt to equity ratio to below 1.0 times from 1.4 times now.

Esso operates a complex refinery with a capacity of 177,000 barrels per day, and a paraxylene plant with an annual capacity of 500,000 tonnes

Morgan Stanley (MS.N) is the IPO's lead underwriter for overseas markets.

The listing is required under an agreement made more than 10 years ago which allowed Esso to build a refinery in Thailand. But the 1997-1998 Asian financial crisis pulled the plug on demand and put refineries into debt.

The share offer is an exit for the Finance Ministry, which will see its 12.5 percent holding wiped out, while Exxon's stake will be diluted to 65.85 percent, including the greenshoe. ($1=31.43 Baht) (Writing by Khettiya Jittapong, Editing by Darren Schuettler and Anshuman Daga)