RT reveals its direction for the second half of 2022, focusing on construction project management strategies while managing material and labor costs, and continuing to bid for government and private sector projects. The company is confident in achieving its backlog target of 8.5 billion baht and plans to issue bonds to invest in new projects, provide working capital for construction projects, and repay loans to financial institutions, with subscription dates set for August 8-10, 2022, and sales on August 11, 2022.

Mr. Chawalit Thanomthin, CEO of Right Tunneling Public Company Limited (RT), a specialist in civil engineering and geotechnics, stated that amidst the ongoing crisis in the construction industry, the company is committed to executing projects swiftly to deliver work on time and to standard. This is coupled with a strategy to manage construction costs by monitoring the situation and periodically assessing the use of construction materials, as well as negotiating with business partners to plan for advance procurement of materials, which has allowed the company to better control construction costs.

As of March 31, 2022, the company had a backlog of 4.782 billion baht, with revenue proportions by project type including tunnel and underground structure construction at 42.73%, dam and irrigation system construction at 32.52%, underground pipe construction using pipe jacking and boring methods at 14.92%, and other works at 9.83%, such as road construction, geological survey drilling, and slope protection.

For the operational direction in the second half of 2022, the company expects an improvement due to the easing effects of the COVID-19 pandemic and the Russia-Ukraine war, which have impacted operations. Factors such as declining construction material and oil prices and the return of construction labor to normalcy are leading to a resumption of construction projects as planned, with continuous revenue recognition. However, the company remains vigilant about business risk factors and is adjusting strategies to align with the situation, focusing on managing both Thai and foreign construction labor in terms of operational procedures on construction sites, labor volume, and transportation to support upcoming construction projects.

At the same time, the company plans to bid for large-scale government infrastructure projects that are set to open for bidding in the second half of 2022, as well as construction works that build upon being a subcontractor, such as tunnel projects, dam and irrigation system projects, underground electrical conduit construction, and slope protection projects, as well as private sector construction projects to continuously increase the company's work opportunities, focusing on high-margin projects that require expertise and experience.

Additionally, the company is in negotiations to undertake hydropower plant projects in the Lao People's Democratic Republic, with clarity expected in the fourth quarter of 2022, and revenue recognition from these projects anticipated in 2023.

“The company has already passed the lowest point of the business cycle and believes that operations in the second half of the year will show positive trends due to the continuous influx of projects, especially large government construction projects currently under negotiation, with clarity expected in the third quarter of 2022. Furthermore, there are several large infrastructure projects set to open for bidding. We are confident that the company's capabilities will enable us to bid for and secure these projects, with the total backlog expected to reach 8.5 billion baht this year, with revenue recognition extending to 2027, marking the highest level since the company's inception,” Mr. Chawalit added.

The company is preparing to offer long-term bonds, specifically named, non-subordinated, and unsecured, with a bondholder representative. The issuer has the right to redeem the bonds before the maturity date, consisting of two series: the first series of unsecured bonds from Right Tunneling Public Company Limited (2022) maturing in 2026, which the issuer can redeem before maturity (“Series 1 Bonds”) with a term of 3 years and 6 months at a fixed interest rate of 5.25% per annum, with interest paid every 3 months throughout the bond's term.

And the second series of unsecured bonds from Right Tunneling Public Company Limited (2022) maturing in 2027, which the issuer can redeem before maturity (“Series 2 Bonds”) with a term of 5 years at a fixed interest rate of 5.75% per annum, with interest paid every 3 months throughout the bond's term. The total value of both bond series offered will not exceed 1 billion baht, with the funds intended for investment in new construction projects that the company is continuously bidding for and securing, as well as for working capital and loan repayments to financial institutions.

Mr. Suriyatham Thamthira, Deputy Managing Director of Asset Pro Management Co., Ltd. (APM), as a financial advisor, stated that the company sees the potential and growth of RT, which is preparing to continuously take on projects, with RT's client base consisting of both large public and private sector clients with stability.

Moreover, RT has been rated by TRIS Rating Co., Ltd. with a rating of ‘BBB-’ and a ‘Stable’ outlook, indicating the business's credibility, as well as being a leader in specialized construction contracting with strong competitive capabilities, including a track record of tunnel and underground structure projects trusted by both public and private clients, making RT's bonds an attractive investment product due to both interest rates and interest payments, and a good option compared to other investment products.

Meanwhile, Mr. Thitiphat Taveesin, Assistant Managing Director of Corporate Finance Solutions & REIT at KTBST Securities Public Company Limited, as the bond distribution manager, stated that this bond offering is targeted at institutional and/or high net worth investors (II&HNW), with participating underwriters including Asia Plus Securities Co., Ltd., CGS-CIMB Securities (Thailand) Co., Ltd., Yuanta Securities (Thailand) Co., Ltd., Phillip Securities (Thailand) Public Company Limited, Nomura Pattanasin Securities Public Company Limited, Mercantile Partners Securities Public Company Limited, Krung Thai Xspring Securities Co., Ltd., and Finansa Cyrus Securities Public Company Limited. The bond registrar is Krungsri Bank Public Company Limited, and the bondholder representative is KTBST Securities Public Company Limited, which is currently seeing strong interest from investors. The company will meet with investors to provide details about the bonds, with subscription dates set for August 8-10, 2022, and bond sales on August 11, 2022.