The Singapore government's investment arm, Temasek Holdings, has strengthened its presence in Thailand's telecom industry, through a US$200-million (Bt7 billion) investment in a wholly owned subsidiary of Shin Satellite.

ShinSat's board has approved the company's plan to sell 49 per cent of Singapore-registered Shenington Investments Pte Ltd - a total of 7.18 million shares at $27.85 each - to Asia Mobile Holdings Pte Ltd.

Asia Mobile is a subsidiary of Singapore Technologies Telemedia, which is wholly owned by Temasek.

ShinSat said in a statement to the Stock Exchange of Thailand that the sale was part of the company's debt-reduction plan.

The proceeds from the deal will be used in ShinSat's capital restructuring, including the prepayment of long-term loans. As of March, ShinSat's consolidated debt stood at more than Bt18 billion.

ShinSat's shareholders will convene next month to approve the connected transaction, as Temasek is a major partner of Shin Corp, the parent company of ShinSat.

Temasek's move was announced amid the Thai authorities' ongoing investigation of the nominee issue involving its investment in Shin Corp. Temasek is also in the process of unloading some of its shares in Shin Corp. While the unloading will increase Shin Corp's free-float ratio and enable it to maintain its listing status, the fewer shares could also reduce public pressure.

The group led by Temasek owns a combined 96 per cent of Shin Corp, which owns 41 per cent in ShinSat.

Temasek's investment in Shin Corp spurred fierce criticism against then prime minister Thaksin Shinawatra, whose Thai Rak Thai Party was dissolved earlier this week.

A financial source said that Telekom Malaysia was the first company to consider buying some Shenington shares late last year as part of its attempt to expand its existing telecom service in Cambodia, but ShinSat failed to make a decision.

Last month ShinSat hired Goldman Sachs to find a buyer for the 49-per-cent stake in Shenington. Among the suitors were Telekom Malaysia, Asia Mobile and Singapore Telecom, a 20-per-cent strategic partner of Advanced Info Service.

Shenington has major investments in two offshore telecom companies, Cambodia Shinawatra, in which it holds a 100-per-cent stake, and Lao Telecommunications, in which it holds a 49-per-cent stake.

ShinSat's share price yesterday closed at Bt10.90, up from Bt8.85.

ShinSat posted a net profit of Bt135 million in the first quarter compared to a loss of Bt58 million over the same period last year.

ShinSat expects that its operations will improve in the second quarter due to an anticipated increase in revenue from the sales of the iPSTAR broadband satellite service in China and continuous iPSTAR terminal orders from the Australia market. Its sales of iPSTAR service in the Indian market are set to start in the second half of this year.

Usanee Mongkolporn

The Nation