Thais come calling with coal in mind

Ratchaburi appears to have been able to sneak under the radar while the focus has been on whether Chinese, Canadian, Singaporean and other foreign companies should be allowed to pick off local groups.

Ratchaburi, Thailand's largest power generator supplying 14 per cent of requirements, has been casting its eye over investments throughout south-east Asia.

Ratchaburi's president, Noppol Milinthanggoon, has been quoted several times expressing his interest in picking up a stake in Australia's coal-fired power industry, and quite possibly a coalmine or two.

Transfield fits the bill nicely, particularly with its 14 per cent stake in Victoria's 2200 megawatt Loy Yang A power station.

As recently as January Noppol was telling a Reuters correspondent that the group was "in talks to buy stakes in power plants and expected to conclude a deal to buy an Australian facility in the middle of 2011".

In December he told the Bangkok Post that it was a strengthening Thai baht that had allowed Ratchaburi to resume talks with potential sellers of assets here. Interestingly, Noppol seems to have been referring not to the value of the baht against the Australian dollar, against which it has softened from 30 to 31.2 over the last year, but against the US dollar where the Thai currency has risen from 32.5 to 30.2 - making Ratchaburi a beneficiary of the US's devaluations of its currency.

Looks like that plan is on track with the announcement by the Transfield fund's largest shareholder, Transfield Services, that it has signed an agreement to work with Ratchaburi on a deal where the Thais own 80 per cent of the fund, and Transfield the balance.

Such a deal would also return Transfield to its more traditional role of building and maintenance, because if the deal is ticked off by the fund's chairman Peter Young and fellow independent directors, Ratchaburi would assume the development responsibilities on wind farm and other projects.

Young and his colleagues are understood to have been weighing the approach from Ratchaburi on Wednesday when it was pointed out that trading in the fund's stapled securities had edged up from 60A? to 65A? on larger than usual turnover.

Because the stock settled back to a 61.5A? close, the fund decided that the trading was probably unrelated a?? although it would no doubt be watching the share transfers on its register over the next three days.

After the 85A? a share conditional offer from Ratchaburi for all the non-Transfield stock in the fund was unveiled, more than 18 million shares changed hands and the price leapt 17.5A? to a 79A? close.

Ratchaburi has not indicated whether it has already bought any shares, but is limited to a stake of 15 per cent until Wayne Swan and the Foreign Investment Review Board sanction a bigger investment.

That may be an interesting test, because while Ratchaburi is a privatised operation, 45 per cent of its stock is held by the state-owned Electricity Generating Authority of Thailand. EGAT also has three out of 13 directors on Ratchaburi's board.

None of that suggests that Ratchaburi runs to the state's direction, although presumably it does know on which side its bread is buttered a?? somewhat like Singapore Stock Exchange's "passive" shareholding in Temasek.

LIGHT THE CIGARS

Daytraders were ordering way more than five Cougars yesterday a?? turnover in Len Walker's Cougar Energy topped 513 million shares and the price nearly doubled.

Cougar, some will recall, has had two stone-off-a-cliff plunges in the past six months, both tied to water contamination issues over its underground coal gasification work near Queensland's Kingaroy.

The last of those was in February when Anna Bligh's state government slapped a ban on the pilot project.

All of that cut the stock from 7A? in September to about 2A?, and there have been doubts about its survival.

Yesterday punters pulled back on the joystick and sent the shares from Wednesday's 2.2A? close to 4.2A? - all on the sniff of progress in its China projects.

More remarkable though was that the volume represented more than 50 per cent of Cougar's total equity, and so far as the company knows none of its larger shareholders were sellers. Then again, barely a quarter of the company is held by the 20 largest investors, and the biggest of them is Walker himself, who Insider was told was not selling.

BUZZ SAW

A small footnote to the report this week of Wattyl being dislodged from Bunnings' shelves - power tool maker Black & Decker copped it in the neck, too.

Although B&D, these days merged with the Stanley Tool Works, was given the bad news last year the effect has apparently been fairly dramatic on its sales, with some estimates that it lost up to 40 per cent of its revenue.

Like Wattyl's displacement due to Taubmans' "exclusivity" guarantee to Bunnings, B&D is believed to have been outbid for shelf space by Ryobi.

Fortunately for the Stanley B&D group, Bunnings did not take the knife to its hand tools.

Management are keenly awaiting their first orders from the rival Woolworths operation to get them back into shape. In terms of jobs, the fortunate thing is that Stanley B&D is an importer rather than a maker of products. No such luck at Wattyl.

insider@fairfaxmedia.com.au