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Published on December 15, 2007

The Charoen Pokphand Group (CP) has provided extra support of Bt3 billion to its True Corp subsidiary, to fund the growth of the cellular operator True Move.

One telecom analyst said True Move would use the funds to pay debts to network suppliers.

In a filing with the Stock Exchange of Thailand yesterday, True said CP had already provided financial support to True Move on behalf of True Corp by injecting capital of Bt3 billion through the subscription of Bitco's rights offering of shares in the amount of six billion shares at 50 satang apiece.

Bitco is the parent of True Move.

The additional support from CP will result in an increase of CP's shareholding in Bitco from 0.76 per cent to 23.92 per cent; and a decrease of the consolidated shareholding percentage of True in Bitco from 98.17 percent to 75.26 percent and that of Wirefree Services Belgium from 1.07 per cent to 0.82 per cent.

This funding from CP, which will be passed from Bitco to True Move, will be used to support True Move's rapidly expanded network coverage. The filing said CP's intention in purchasing Bitco shares was only to fulfil its obligation under the so-called Sponsor Support Agreement with the creditors of True Move, because CP does not wish to hold this amount of Bitco shares permanently.

True retains the right to buy back the shares priced on a cost-plus basis at any time within the next 18 months - at Bt0.53 if exercised within the first six months, Bt 0.56 if exercised between six months and 12 months, and Bt 0.59 if exercised between 12 months and 18 months. True CEO Supachai Chearavanont said True would definitely buy back the shares.

Recently, the True Group announced it would spend Bt10 billion next year out of its cash flow on further business development, most of it for True Move network expansion.

Currently, True Move has more than 12 million subscribers.

True Corp insists it has no intention of seeking a strategic partner in the near term to improve its financial position and finance its new investment in True Move.

The Nation