HONG KONG-True Corporation, the Thai telecommunications company controlled by the billionaire Dhanin Chearavanont, said Tuesday that it would spin off 3G and broadband networks into an infrastructure fund in an initial public offering worth at least 70 billion baht â€" a potential record for a Thai company.
True, which operates fixed-line and mobile communications networks and a pay television business in Thailand, said it planned to use the proceeds from the $2.26 billion I.P.O. to pay down debt.
The planned spinoff is part of a flurry of deal making by Mr. Dhanin and his company, Charoen Pokphand Group, or CP Group. In April, another one of his companies said it would buy the discount retailer Siam Makro for more than $6 billion. In February, CP Group completed the $9.4 billion purchase of a 15.6 percent stake in Ping An Insurance Group of China from HSBC Holdings, which it had announced in December.
By spinning off assets into an I.P.O., True, which is 63.3 percent owned by CP Group, is seeking to capitalize on a 70 percent increase in its share price so far this year. The company is also hoping that investors in Asia retain their appetite for infrastructure funds.
In April, a fund controlled by BTS Group, the operator of the SkyTrain urban rail system in Bangkok, raised a record 62.53 billion baht, or $2.13 billion, which at the time ranked as the largest I.P.O. anywhere by a Thai company. Units in that fund were trading at 10.80 baht apiece Tuesday, or 10 percent below the listing price three months ago.
The spinoff of some network assets should help ease concerns among analysts over the pile of debt that True has racked up in its efforts to build out and maintain its telecommunications network in Thailand. The company had net debt of 94.8 billion baht at the end of 2012, equal to 5.5 times its earnings before interest, tax, depreciation and amortization.
True’s proposal would package 13,000 telecommunications towers; 45,000 kilometers, or 28,000 miles, of fiber-optic cable networks; and the revenue from its sprawling 3G networks into a standalone infrastructure fund. True in turn would lease back some of those assets for a maximum of 15 years in a deal worth no more than 55 billion baht, according to its filings with the Bangkok stock exchange.
True would also buy a stake of at most 33.3 percent in the fund’s I.P.O.
The proposed spinoff is subject to approval in a shareholders’ vote scheduled for Sept. 12 and also needs the approval of the stock exchange.
Shares in True rose 5.7 percent after Tuesday’s announcement to close at 9.25 baht apiece.
