PM: Govt wants to buy back Thaicom

Prime Minister Abhisit Vejjajiva has confirmed his government is interested in buying back satellite operator Thaicom from Temasek Holdings of Singapore.

"If we look back to when Temasek bought the shares of the parent company [Shin Corp], it clarified to the public and the stock exchange that it had no intention of acquiring the satellite business," Abhisit said.

"We are considering this proposal. The finance minister is conducting the negotiations. I think it will be useful if we can get it back, but we have to look at the cost and reasonable price levels."



Shin, which was founded by family members of ousted prime minister Thaksin Shinawatra, owns 41.14 per cent of Thaicom and 42.6 per cent of Advanced Info Service (AIS). Cedar Holdings and Aspen Holdings, belonging to Singapore's state investment arm, Temasek Holdings, jointly own more than 96 per cent of Shin.

The Shinawatras disposed of their shares in Shin, amounting to a stake of more than 46 per cent, to Temasek in January 2006 in a deal worth Bt73 billion.

CONTROVERSIAL ACQUISITION

Thaicom now owns the Thaicom 2 and Thaicom 5 broadcasting satellites and the iPSTAR broadband satellite. The company posted a first-quarter net loss of Bt157 million, against a net loss of Bt220 million in the same period last year.

Temasek's acquisition of Shin was controversial from the outset, because as well as mobile-phone operator AIS, it also held a majority of shares in television broadcaster iTV and Shin Satellite. iTV was later returned to the Thai government through legal processes, but the Thaicom case is still pending. Both businesses are deemed to be of national-security concern.

Finance Minister Korn Chatika-vanij yesterday declined to confirm the government wanted to take over Thaicom.

He said he had travelled to Singapore to explain the political situation to Temasek Holdings after Thaicom's satellite station had been attacked by red-shirt protesters. However, he declined to divulge details of the discussion.

"The fact is when the red-shirt protesters gathered at the satellite station, the prime minister instructed me to clear up with Temasek, the major shareholder of Shin. I did as I was told, but I won't say what we talked about or comment on reports I led the negotiations to buy back Thaicom, because Thaicom is a listed company. There is no special agenda worth talking about. It seems to be inappropriate here," Korn said.

However, Sirichoke Sopha, an aide to the prime minister, said the Finance Ministry and related state enterprises, including MCOT and CAT Telecom, were studying the possible acquisition of Thaicom from Temasek Holdings.

The issues will include the price to propose, the assets and the performance of the company, he said.

"The price will also depend on whether we buy the whole of Thaicom's business or only the satellite part," Sirichoke said.

Thaicom's share price yesterday nearly hit the ceiling, closing at Bt7.05, or 29 per cent above last Friday's closing price, as investors reacted positively to the reports. At that price, the market capitalisation of the company has skyrocketed to nearly Bt39 billion.

NATIONAL-SECURITY ISSUE

A source from the Information and Communications Technology (ICT) Ministry, which owns Thaicom's concession, said the government did not want to buy Thaicom, but rather was interested in seizing the concession with the idea that the satellite business was a national-security issue and should be run by Thais.

The source said the government realised it would be inappropriate to take over the business with its own budget.

Yesterday, ICT Minister Juti Krairerk, on his first day in office, instructed state telecom agencies to wrap up for him within 21 days which past telecom-concession amendments were unlawful and how they should be rectified.

Last December, the council of economic ministers asked the ICT and Finance ministries to examine all past unlawful concession amendments jointly and make them comply with the Public-Private Joint-Venture Act of 1992. But there has been no progress.

The State Enterprise Policy Office said there had been 40 concession amendments in the past 10 years.

In 2007, the government's legal arm, the Council of State, ruled that over the years, the amendment of some private telecom concessions under TOT and CAT had not followed the procedures of the Public-Private Joint-Venture Act or been approved by the Cabinet at the time.

Juti said he realised the private telecom concession holders could resort to legal action if the amendments were unlawful and were reinstated to their original provisions.

 If this goes to court, it could entail years of prosecution, he said.

Juti said he would like to see the government take over Thaicom, because the satellites it owned were national assets. As a Thai, he wants the company to belong to Thais.

He said Abhisit had yet to fix a policy on a Thaicom takeover. If the government wants to buy the company, it will first have to conduct due diligence.

Juti said the prime minister had assigned him four main tasks: working with honesty, overseeing the Thaicom concession, promoting e-commerce and cracking down on websites containing lese-majeste content.

He said he would ask the Foreign Ministry to speak with the International Telecommunications Union to maintain reservations on the orbital slots of Thaicom satellites that had already been decommissioned.

Recently, Thaicom deorbited Thaicom 1, whose lifespan expired last year. Thaicom 2 will be decommissioned about the middle of this year, while Thaicom 3 was deorbited many years ago following a technical glitch.