Shin Corp has divested its entire stake worth Bt472 million in Thai AirAsia to six directors of the budget carrier, in a bid to refocus on its core telecommunications business.

A source close to Singapore's Temasek Holdings, which led a group of investors in taking over 96 per cent of Shin Corp last year, said this was in line with Temasek's plan.

"Temasek has always wanted control solely of Advanced Info Service [AIS] and it has looked for ways to unload stakes in other businesses, particularly those not related to the telecom business," a source said. "Thai AirAsia's management has been approaching us for the stake for some time, but it was finalised only after they found a loan to finance the purchase."

Shin Corp said in a filing to the Stock Exchange of Thailand that the deal would be completed by the end of the month.

"The divestiture of Thai AirAsia's stake is part of Shin Corp's strategy to focus on the group's core telecom and media businesses," a Shin Corp spokeswoman told Agence France-Presse.

"Budget carrier Thai AirAsia is considered a non-core activity," she added.

To follow the plan to refocus on the telecom business, Shin Corp would need to unload its 53-per-cent stake in iTV, the broadcasting company which lost its broadcasting licence in March.

It would also need to sell 100 per cent of Capital OK, a small lending business which has been in financial trouble since the withdrawal of the Development Bank of Singapore.

Shin Corp holds stakes in three listed telecom companies: 42.76 per cent of AIS, 41.32 per cent of Shin Satellite, and a stake in CS Loxinfo through Shin Broadband Internet.

Ending its role in Thai AirAsia, Shin Corp will sell the 49-per-cent stake in Asia Aviation to Thai AirAsia's six directors led by the budget

airline's chief executive of-

ficer Tassapon Bejleveld.

Asia Aviation was established shortly after the Shinawatras' and Damapongs' sale of their shares in Shin Corp to the Temasek-led group, which raised Thai AirAsia's foreign ownership above the 49-per-cent statutory limit. Shin Corp transferred its 50-per-cent stake in Thai AirAsia to Asia Aviation, and sold a 51-per-cent stake in the new company to a logistics businessman Sitthichai Veera-thammanon.

"It is likely that Thai AirAsia's management is considering whether to offer to buy more shares from Sittichai,"

the Shin Corp spokeswoman said.

According to Tassapon, the six directors and executives financed the Bt472-million investment entirely through loans. They will buy 20 million shares at Bt23.50 apiece.

"Shin Corp was open to all who could buy the stake and the deal was done only when each of us found sources of funds to finance the purchase," Tassapon said yesterday. "We bought the shares because all of us have been working for the airline from the beginning and we believe in its bright future."

Tassapon will hold 26 per cent in Asia Aviation. He owns one per cent in Thai AirAsia, which is owned 49 per cent by Malaysia-based AirAsia. The five other buyers are Pornanan Gerdprasert, Thai AirAsia's chief financial officer; director for operations Thanapat Ngamplang; director for engineering Preechaya Ramametanin; director for business development ML Bovornovadep Devakula; and director for commercial Santisuk Klongchaiya.

Tassapon said the change in Thai AirAsia's shareholding structure would not affect the company's operations in Thailand and overseas. "Shin Corp has never intervened in the management or at the operating level. Things will remain like that."

The end of the relationship with Shin Corp will also distance Thai AirAsia from the investigation into nominees being used during last year's Temasek takeover of Shin.

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