True Corporation has half-heartedly yielded to pressure from its concession owner CAT Telecom to exclude its network assets under a dispute with CAT from its planned 70-billion-baht infrastructure fund.
Suphachai Chearavanont, True's president, admitted the decision was made to resolve the latest dispute between the two and ensure a good partnership.
True was locked in a dispute with CAT over the ownership of 20% of True's network assets.
Both have yet to agree on whether True should return 7,000 telecommunications towers to CAT, as True operates second-generation (2G) service under a build-transfer-operate concession.
The telecom tower dispute is still tied up in arbitration.
"We can move ahead now with our infrastructure fund as planned without future disruption," said Mr Suphachai.
Chief financial officer Noppadol Dej-udom said True's infrastructure fund is expected to be listed on the Stock Exchange of Thailand (SET) this year.
"The listing will be at least 70 billion baht," said Mr Noppadol.
He said an official filing will be submitted to the Securities and Exchange Commission as soon as possible to seek approval for the country's second infrastructure fund after the BTS Rail Mass Transit Growth Infrastructure Fund.
Mr Noppadol said True initially did not include the disputed network assets in the fund.
Last month True reported to the SET that its board approved a fund-raising plan via an infrastructure fund listing.
Under the plan, True will sell telecom towers, fibre-optic cable networks, broadband networks and the rights to gain revenue from equipment rental to the fund.
It will in turn rent the assets from the fund for a maximum term of 15 years.
The company will also buy one-third of the fund's units.
True has 13,000 telecom towers _ 7,000 belonging to True Move, the group's mobile flagship, and 6,000 to True Corporation.
Mr Noppadol said True will use at least 60% of the proceeds from the listing to repay debts and the rest for 3G network expansion. True has 100 billion baht worth of debt.
"Our net debt-to-earnings ratio is expected to stand at two times after the debt payment, down from five times," said Mr Noppadol.
"As well, our interest costs will decline sharply from 8 billion baht per year now."
He said True will resume partnership talks with prospective foreign firms for its mobile operating unit True Move early next year.
True projects its loss-ridden True Move will break even in the fourth quarter after six consecutive years of losses thanks to more 3G customers.
But the full-year financial results for the True Group will remain in the red. True posted a net loss of 6 billion baht last year.
Shares of TRUE closed yesterday on the SET at 7.70 baht, down 35 satang, in heavy trade worth 2.71 billion baht.
About the author
- Writer: Srisamorn Phoosuphanusorn
Position: Deputy Business Editor