HONG KONG-A fund controlled by the operator of Bangkok’s sprawling SkyTrain urban rail system on Friday raised a record 62.53 billion baht, or $2.13 billion, in the largest initial public offering anywhere by a Thai company.
BTS Group, the rail system’s operator, sold 5.79 billion units in the BTS Rail Mass Transit Growth Infrastructure Fund to the public at a final price of 10.8 baht per unit, at the top of the marketed price range, the company said in an announcement to the Stock Exchange of Thailand.
Investors in the fund will receive revenue from passenger fares on the SkyTrain service, which carried a record 50.3 million riders in the fourth quarter of 2012. BTS will retain a one- third stake in the fund, and plans to use the proceeds from the I.P.O. to further expand its rail system by building feeder lines to its core network in the Thai capital.
BTS’s chairman and controlling shareholder, the Bangkok millionaire Keeree Kanjanapas, is cashing in on investors’ renewed faith in rising wealth and continued urbanization in the Southeast Asian nation. The Thai government is depending on private sector investment to help fund ambitious plans to expand Bangkok’s mass transit rail system to more than 500 kilometers, or 310 miles, by 2029; it is less than 100 kilometers today.
As an incentive, the government has granted 10-year income tax holidays to investments by individuals in infrastructure funds. BTS’s fund offers investors access to strong cash flows. The parent company said mass transit operating revenue rose to 1.53 billion baht in the fourth quarter, up 13.7 percent from a year earlier.
BTS, whose shares are up 27 percent so far this year, also makes money from advertising on its trains and from developing real estate near its train stations.
The BTS Growth Infrastructure Fund units are set to begin trading in Bangkok on April 19. Morgan Stanley, UBS and Phatra Securities of Thailand were the managers of the I.P.O.
