China Mobile reached a deal to acquire an 18 per cent stake in Thailand’s third-largest operator True Corp, for around $880 million.
CMI Holdings, a subsidiary of China Mobile, entered into a share subscription agreement with True and signed a related cooperation memorandum with the Thai company. CMI Holdings is to subscribe to 4.43 billion True shares, priced at THB6.45, for a total of THB28.57 billion.
In a separate stock exchange filing, True said it plans to raise $1.1 billion in a rights issue. The company will offer 5.65 billion shares priced at THB6.45, 13 per cent below the share price when trading stopped following the announcement, according to Bloomberg.
True is looking to raise funds to cut debt and finance the rollout of 4G services. The company had been considering an ‘infrastructure fund’ IPO to raise funds, in which it would sell infrastructure assets and lease them back to provide the fund with steady revenue.
At the end of the first quarter, True had 23.1 million connections, according to GSMA Intelligence figures. This put it in third place in Thailand behind market leader AIS, which had 42.4 million connections, and Telenor-owned DTAC on 28.2 connections.
China Mobile, which is the world’s largest mobile operator in terms of subscribers and connections, first expanded outside its home market in 2007, when it acquired control of the Pakistan unit of Millicom International for £284 million. The Zong brand now has 25.6 million connections, making it the third-largest operator in Pakistan.
An agreement for China Mobile to acquire a stake in Taiwan’s Far EasTone was ditched in April last year after regulatory hurdles proved too difficult to overcome.