Thursday, August 28, 2008

True Corp could trim its investments

True Corp could trim its investments

Mobile and cable holdings may be cut


True Corp could divest part of its shareholdings in cable operator TrueVisions, as well as mobile phone provider True Move, according to True chief financial officer Noppadol Dej-udom.

But he ruled out any immediate deal, saying that the telecommunications conglomerate had until mid-2009 before it faced the need to raise funds.

Bitco, the holding company parent of True Move, raised three billion baht in capital last year through a rights offering to the CP Group, a major shareholder of True Corp. True Corp has the right to repurchase the 23% Bitco shareholding until July 2009 at the offering price of 0.5 baht per share plus carrying costs of 12%.

Mr Noppadol said True has not yet decided how it would finance the share buyback.

A debt issue was one possibility, although market volatility and rising yields make this an unattractive offer at the moment.

True itself could also issue new shares, also an unattractive prospect considering the dilution effect on existing shareholders.

''Another possibility would be to sell off some portion of TrueVisions or True Move to a new strategic partner,'' Mr Noppadol said. ''There is considerable investor interest in both companies.''

True currently holds 99% in TrueVisions and controls 76% in True Move, the country's third-largest mobile phone operator.

Mr Noppadol said any transaction this year was highly unlikely considering current market and economic trends. In any case, True would continue to hold a majority shareholding in both TrueVisions and True Move to support the company's overall ''convergence'' strategy blending content across different telecommunications channels.

''Forget about any deal over the next four months. It's impossible. The political situation and overall telecommunications market is simply not supportive of an asset sale,'' he said.

Athueck Asvanund, vice-chairman of True Corp, said there were no plans to discuss a possible share sale at the company's board meeting this month.

''It's not an issue at the moment, and True has no need right now to raise cash,'' he said.

True reported first half profits of 65.89 million baht compared with losses of 282 million last year. First-half revenues rose 2.5% year-on-year to 31 billion baht.

Shares of True on the Stock Exchange of Thailand closed yesterday at 2.32 baht, down 10 satang, in trade worth 32.35 million baht.

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