http://biz.thestar.com.my/news/story.asp?file=/2006/10/18/business/15756518&sec=Wednesday October 18, 2006
Temasek to sell 46% of Shin
BANGKOK: Singapore state investment firm Temasek is expected to sell up to 46% of Thai telecommunications group Shin Corp to resolve a foreign ownership dispute, a fund management source said yesterday.
The sale, which is expected to be completed by November, would reduce Temasek’s aggregated holding in Shin to 48.99%, the source, who declined to be identified, told Reuters.
Temasek wanted to sell above 40 baht (US$1.07) a share, but was not looking for more than the 49.25 baht it paid for a controlling stake in the company from the family of now-ousted Prime Minister Thaksin Shinawatra, the source said.
Even if it managed to sell at 40 baht a share, Temasek would be realising a loss of around US$330mil on a US$3.8bil investment wrapped up in March. Shin shares, which fell 40% in the three months after the deal was completed as a political and nationalist campaign against Thaksin and Singapore gathered steam, rose 4.4% to 35.5 baht. Half of the shares for sale would be offered to other companies and half to institutional and retail investors, the source said.
Potential major buyers included Siam Commercial Bank, industrial conglomerate Siam Cement and liquor tycoon Charoen Sirivadhanabhakdi, owner of Singapore-listed Thai Beverage PCL, the source added.
Temasek is expected to complete the sale in November, before a court ruled on whether to revoke licences of Shin subsidiaries such as mobile phone firm Advanced Info Service, Shin Satellite and broadcaster ITV due to the alleged violation of the alien ownership laws, he said.
“Temasek is negotiating with several potential buyers on selling Shin Corp shares. They want it to be done before the court decides on the licence case of Shin companies and the offer price will depend on market conditions,” the source said.
Analysts said dumping nearly a quarter of Shin on the market might not be easy, especially given the political climate in Thailand after a bloodless Sept 19 coup against Thaksin and investigations into the deal still under way.
“Potential buyers should think twice about buying Shin shares, especially while the licence case is still pending a court hearing and the takeover is being looked at by graft-busters,” Kosin Sripaiboon of UOB Securities said.
Temasek was not immediately available for comment. Temasek bought a 49.6% stake in Shin from Thaksin’s family in January for US$1.9bil, then bought a further 45% through a tender offer, leaving a small fraction as a free float.
Since its announcement, the investment has been dogged by problems. In particular, its tax-free nature fuelled street protests against Thaksin that ultimately led to his removal by the army.
Thaksin’s enemies also jumped on the deal, saying it broke laws that appear to prohibit foreign ownership of key Thai businesses, even though legal experts say its structure appeared to mirror that allowed in thousands of previous cases.
In a statement sent to Thai media and seen by Reuters, Temasek said it was prepared to cut its holding in order to increase the amount of shares on the open market.
“We would like to reduce our shareholding in Shin Corp at the appropriate time and in an appropriate manner to maintain an orderly market,” senior managing director Jimmy Phoon said.
“We believe it is good for listed companies to have a healthy float of retail public and strong institutional shareholders.” – Reuters