ShinSat reported to the Stock Exchange of Thailand (SET) yesterday that it had concluded negotiations on the terms and conditions of the deal and signed the agreement with AMH last Friday.

Shenington is an investment holding company that fully owns Cambodia Shina-watra and has a 49-per-cent stake in Lao Telecommunica-tions.Under the terms of the agreement, AMH will pay $200 million in cash for its stake in Singapore-based Shenington, while ShinSat will remain the controlling shareholder with a 51-per-cent stake.

ShinSat is currently 41.32-per-cent owned by Shin Corp, which in turn is 96-per-cent controlled by a group led by Singapore's state investment arm, Temasek Holdings.

AMH is a joint venture between Qatar Telecom and ST Telemedia with focus on telecoms investment in the Asia-Pacific region. AMH currently holds interests in StarHub in Singapore and PT Indosat Tbk in Indonesia.

Temasek indirectly owns 75 per cent of shares in AMH.

The deal still needs approval from ShinSat's minority shareholders at a meeting on July 4.

ShinSat told the SET last week that the proceeds from the deal would be used to repay debt and as working capital. According to brokerage house UOB KayHian, if the entire proceeds of the sale are used to retire its existing debt, ShinSat's outstanding loans will drop from Bt15.9 billion to Bt9 billion.

The brokerage said the delay and slowness in deploying its existing IPSTAR broadband satellite had left ShinSat unable to meet debt repayment and the company was therefore negotiating with debtors to reschedule the repayment period.

UOB KayHian expects that the partial repayment of the existing debt is part of a debt-restructuring process and ShinSat was therefore forced to sell a profitable operation like Shenington.