"If we unload the shares at good prices, it will save taxpayers' money as the Finance Ministry won't need to bear as large a burden as planned," Bank of Thailand Governor Tarisa Watanagase said yesterday.

The fund faces Bt1.3 trillion in debt from bailing out failing financial institutions.

Besides high offers, the fund will also take into account the qualifications of the interested investors in order to help fortify the banks' businesses.

Both foreign and local institutional investors are welcome to make bids, but retail investors should form a group first because individually they would not know how to quote a price.

"It doesn't mean that we will sell to any particular person. The suitability of investors is the important factor. We have to consider the terms of the package. If the offers vary greatly, we have to be concerned about the proceeds the fund should obtain," Tarisa said.

As of March, the FIDF owned 32.88 per cent of BankThai, 47.58 per cent of Siam City Bank and 55.52 per cent of Krung Thai Bank.

The share sale is the key obligation for the fund to shut down in five years. It has had to put off its privatisation plan for years amid the gloomy stock market.

Tarisa declined to disclose when the fund would divest all its bank holdings because that could have a detrimental impact on prices.

The FIDF has just reduced its stake in BankThai to make room for three new strategic partners: TPG Capital, Blum Capital and Marathon Asset Management.

Tarisa said the central bank encouraged commercial banks to get stronger and bigger ahead of financial liberalisation. They also need to lay out effective strategies to compete in the region as the domestic market could reach maturity.

The banks can find appropriate ways to help themselves. They do not need to combine with other financial institutions to reinforce their financial status but can seek out strategic partners, she added.

"The banks must have their own strategies because our domestic market is small. It will grow at a particular pace, which will push banks to expand to regional countries. Banks must consider how they will go to that point," she said.

The central bank has tried to clear potential hurdles to mergers and acquisitions such as taxes and the limit on foreign shareholdings.

Anoma Srisukkasem

The Nation