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True Corp hopes for full subscription of growth fund

Infrastructure scheme expected to flourish despite political situation

True Corp has faith that its Bt58.08-billion True Telecommuni-cations Growth Infrastructure Fund will be fully subscribed, despite the tense political situation.

The cellular operator is on a domestic roadshow, with stops in Hat Yai last Monday, Khon Kaen today and Chiang Mai tomorrow.

Chief financial officer Noppadol Dej-Udom said yesterday that the fund received a warm welcome during the recent roadshow to Singapore, Hong Kong, Britain and the United States.

Many companies have postponed their initial public offerings from late this year to some time next year, because of the unfavourable political climate.

This gives an opportunity to draw investors to TRUEGIF.

True expects to join with its parent Charoen Pokphand to buy 33.33 per cent of the units. True expects to spend more than half of the funds raised on paying debt while using the rest to support bids for a telecom spectrum licence and a terrestrial digital TV licence. After that, it will start seeking a strategic partner, Noppadol said.

Subscription is open from last Monday to next Monday for the first telecommunications infrastructure fund in Thailand. It will start trading on the Stock Exchange of Thailand on December 27.

The IPO price is Bt10 per unit and the initial allocation to retail investors is 2.38 billion units. For general investors, subscriptions start at 5,000 units and go up in multiples of 1,000 units. The allocation is expected to be finalised no later than next Wednesday.

The fund will hold stakes in 6,000 telecommunications towers, a core fibre-optic grid of 5,112 kilometres and related transmission equipment, and 1.2 million ports in a provincial broadband system.

It will have the right to benefit from the net revenues generated from the lease of 5,845 towers and core fibre-optic grid and related transmission equipment of 47,250 kilometres.

It will also have the potential to own certain assets that can be sold or transferred to TRUEGIF under designated conditions and timelines.

Jotika Savanananda, president of SCB Asset Management Co, said recently that the establishment and management of TRUEGIF was approved by the Securities and Exchange Commission on December 4. The financial adviser is Siam Commercial Bank.

The expected first-year yield is 8.80 per cent, comprising 6.87 per cent in dividends from projected distribution income and 1.93 per cent in a capital reduction due to excess liquidity from advance rental payments, which will incur only in the first two years.

The fund's rental income is expected to increase, resulting in relatively stable annual returns.


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