BANGKOK, July 23: Thailand’s True Corp Pcl, the second most indebted telecommunications firm in Southeast Asia, said it plans to set up an infrastructure fund worth at least $2.25 billion and launch an IPO of the fund to help pay down debt.
True Corp shares jumped to their highest in more than a month on the news.
The planned fundraising comes after BTS Group earlier this year raised $2.13 billion via the initial public offering of a similar-styled infrastructure fund. The success of that IPO, Asia-Pacific’s biggest so far in 2013, has encouraged other firms to tap equity capital markets.
True Corp, backed by Thai billionaire Dhanin Chearavanont, said in a statement on Tuesday that it would establish an infrastructure fund worth at least 70 billion baht ($2.25 billion). True Corp will sell assets including towers and fibre optic cable networks to the fund and then lease them back, providing steady revenue for the fund.
True Corp will buy one-third of the fund’s units and the remaining two-thirds will be offered to the public, with some of the proceeds to be used for debt repayment.
The company said the amount to be raised would depend on market conditions and investor interest. It did not say when it plans to list the fund, although a listing could not take place before Sept 12., when the sale of assets to the fund must be approved at a shareholders meeting.
True Corp had net debt of $3.3 billion as of the March quarter, according to Thomson Reuters StarMine.
The fundraising will help True Corp alleviate some concerns about its financial position. Last month, Moody’s Investors Service cut its outlook on True’s credit ratings to ‘negative’ from ‘stable’, citing the company’s deteriorating financial profile due to the need to invest in its 3G networks and services, and tough competition.
True Corp shares jumped 5.7 percent in early trade, outperforming a 1.6 percent rise in the Thailand’s benchmark share index.
True Corp has hired Credit Suisse and UBS to advise on the listing, IFR reported last month. ($1 = 31.0850 Thai baht)
(AGENCIES)
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