“There has been discussion on this deal for some time but the talks heated up in the past six weeks,” said one of the advisers.

Cedar was established on January 17, a week before the deal was announced yesterday. Kularb Kaew was established two weeks ago while Aspen was set up last Monday.

Cedar and Aspen yesterday wrapped up the takeover to buy 49.6 per cent from the Shinawatra and Damapong families for Bt73.3 billion. Kalarb Kaew holds 41 per cent of Cedar.

According to former DBS Bank chairman Pong Sarasin, chairman of Kularb Kaew, even though the deal was sealed, Kularb Kaew could be subject to a shareholding change soon.

“Kularb Kaew was established to make Shin a Thai firm after the transactions, but I’ll soon have to sell the stake,” Pong said.

The change in shareholding structure is cited as a means to repay a Bt24 billion loan extended by Bangkok Bank and Siam Commercial Bank to help finance the share purchase. To repay the loans, Kularb Kaew will sell its shares to local investors – including financial institutions and private funds – to seek funds to repay the loans, Pong said.

Under the deal, Temasek Holdings brought in nearly Bt50 billion for the purchase, which was paid through its wholly-owned arm Aspen, while the Bt24 billion was financed by the loans.

Siam Commercial Bank president Jada Watanasiritham said that her bank’s Bt11 billion loan contained no risk as it was fully guaranteed by leading banks in Singapore.

“We have discussed this with the board and we see huge benefits from lending to the country, the telecom industry and the bank itself,” she said. Under the deal, SCB is also a shareholder in Cypress Holdings, which in turn is a major shareholder in Cedar. “This is meant to be a long-term investment,” Jada added.

Of all the Shin shares that changed hands, 38.6 per cent were bought by Cedar and the remainder by Aspen.

Kularb Kaew was co-established two weeks ago by Pong and Supadet Poonpipat, chief executive of Thanachart Bank, together with Temasek. Pong and Supadet jointly own 51 per cent in Kularb Kaew, while Temasek owns 49 per cent. The company’s total registered capital is about Bt160 million.

A financial analyst expressed doubt the Shinawatra family would set up a local fund to acquire shares in Kularb Kaew. If the family did, it would mean they would still have a controlling interest in Shin.

“Anyway, if the family did that, it would be hard to trace and that means the family’s image will remain good,” the source added.

It has been speculated that one reason for the prime minister’s family’s exit of Shin is to deflect criticism of conflict of interest, but a family representative, Suvarn Valaisathien, said yesterday that the decision of the Shinawatra and Damapong families to dispose of their combined 49.6 per cent share to the Temasek-led group was a purely business one.

He said that the families do not want to further invest in the capital-intensive telecom business.

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