Debt-laden True Corp, which runs mobile and fixed networks in Thailand, has put on hold its search for a business partner until it resolves a dispute with state-owned CAT Telecom that threatens to derail a money-raising scheme centred on its infrastructure assets.
In a statement last week, True Corp said it would establish an infrastructure fund with the aim of raising at least THB70 billion ($2.25 billion) from its subsequent listing.
The idea is for True Corp to sell assets to the fund, including towers and fibre-optic cable networks, and then lease them back (so providing the fund with steady revenue).
The beleaguered Thai firm – labouring under a THB100 billion debt mountain – would then purchase one-third of the fund’s units. The remaining two-thirds would then be offered to the public to help pay down debt.
With the promise of a more solid financial footing – True Corp said it also plans to sell non-core assets for THB5 billion – the company said it was also looking for a strategic partner.
According to local media reports, however, Noppadol Dej-udom, the firm’s chief financial officer, has said the search for a partner had been put hold until the infrastructure fund has been set up and non-core assets sold.
The progress of the fund is being hampered, though, as a dispute over ownership of 4,500 towers – assets pencilled in for the infrastructure fund – has yet to be resolved between True Move (a True Corp company) and CAT Telecom.
There are signs that some progress is being made here. According to nationmultimedia.com, a Thai news outlet, TrueMove has reached a preliminary agreement to transfer to the state agency 4,500 of the 7,000 telecommunications towers it utilises under its concession with CAT.
Reportedly, TrueMove has also proposed buying back the 4,500 towers from the state agency and including them in the infrastructure fund’s assets.
Anudith Nakornthap, the country’s Information and Communications Technology Minister, said CAT had informally notified him of this buy-back proposal but added that it might not be quickly achieved, as the buy-back plan would be subject to the regulations of the state enterprises involved, while the targeted telecom towers would have to be valued.
Raising money as quickly as possible is a priority for True Corp. It has plans to spend THB15 billion this year alone on expanding its 3G and 4G networks as rivals launch high-speed mobile services to gain market share from fast growing mobile data.
And both market leader Advanced Info Service and second-ranked Total Access Communication have foreign partners, something which True Corp hopes to emulate.