True cuts debt by $1.7B after China Mobile tie-up - Mobile World Live

True cuts debt by $1.7B after China Mobile tie-up

12 SEP 2014

True has formalised a strategic partnership with China Mobile to cooperate on 4G technology, give the Thai operator scale on handset purchases and reduce its overall debt burden.

The official signing yesterday follows China Mobile acquiring an 18 per cent stake in True for THB28.6 billion ($880 million) through a private share placement.

The share sale was part of the Thai operator’s plan to raise THB65 billion ($2.03 billion) through an equity issue. The remaining portion of the recapitalisation was an offering to existing shareholders and worth about THB36.4 billion.

True is raising funds to cut debt and finance the rollout of 4G services. The company had been considering setting up an ‘infrastructure fund’ IPO , in which it would sell infrastructure assets and lease them back to provide the fund with steady revenue.

The latest moves have allowed True to repay THB55 billion ($1.7 billion) in debt, lowering its debt burden to THB10 billion.

CEO Suphachai Chearavanont said at a press conference yesterday its net debt to earnings before interest, taxes, depreciation and amortisation has dropped to 1.5 times from 5.1 times.

As part of the deal, True will expand its board from 15 to 18 members, with China Mobile to have three representatives.

A statement from True said the two companies would set up committees and working groups in six areas: products, value-added services and content; international business; networks; device procurement; general procurement; human resources.

No specifics were given on the benefits for China Mobile, but a China Mobile representative said the deal allows “each party to not only serve its local market better, but also lays a good foundation for exploring prospective business opportunities and expansions in each other’s market”.


Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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