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Thai Billionaire Plans $2.3 Billion Infrastructure Fund I.P.O.

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JULY 23, 2013, 4:14 AM

BY NEIL GOUGH

HONG KONG – The True Corporation, the telecommunications company controlled by the Thai billionaire Dhanin Chearavanont, said on Tuesday that it would spin off 3G and broadband networks into an infrastructure fund in an initial public offering worth at least 70 billion baht — a potential record for a Thai company.

True, which operates fixed-line and mobile communications networks and a pay television business in Thailand, said it planned to use the proceeds from the $2.26 billion I.P.O. to reduce debt.

The planned spinoff is part of a flurry of deal-making by Mr. Dhanin and his company, the Charoen Pokphand Group, or CP Group. In April, another one of his companies said it would buy the discount retailer Siam Makro for more than $6 billion. In February, CP Group completed the $9.4 billion purchase of a 15.6 percent stake in the Ping An Insurance Group of China from HSBC Holdings, which it had announced in December.

By spinning off assets into an I.P.O., True, which is 63.3 percent owned by CP Group, is seeking to capitalize on a 70 percent increase in its share price this year. The company is also hoping that investors in Asia retain their appetite for infrastructure funds.

In April, an infrastructure fund controlled by the BTS Group, operator of the SkyTrain urban rail system in Bangkok, raised a record 62.53 billion baht ($2.13 billion), which at the time ranked as the largest I.P.O. anywhere by a Thai company. Units in that fund were trading at 10.80 baht apiece on Tuesday, or 10 percent below the listing price three months ago.

The spinoff of some network assets should help ease concerns among analysts over the pile of debt that True has racked up in its efforts to build out and maintain its telecommunications network in Thailand. The company had net debt of 94.8 billion baht at the end of 2012, equal to 5.5 times its earnings before interest, tax, depreciation and amortization.

True’s proposal would package 13,000 telecommunications towers, 28,000 miles of fiber-optic cable networks and the revenue from its sprawling 3G networks into a stand-alone infrastructure fund. The company in turn would lease back some of those assets for a maximum of 15 years in a deal worth no more than 55 billion baht, according to its filings with the Bangkok stock exchange.

True would also buy a stake of at most 33.3 percent in the fund’s I.P.O.

The proposed spinoff is subject to approval in a shareholders’ vote scheduled for Sept. 12 and also needs the approval of the stock exchange.

Shares in True rose 5.7 percent after the announcement to close at 9.25 baht apiece.

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Taken from The New York Times, DealBook: http://dealbook.nytimes.com/2013/07/23/thai-billionaire-plans-2-3-billion-infrastructure-fund-i-p-o/

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This entry was posted on July 23, 2013 by in News Articles and tagged , , , , , , , .
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