UPDATE 2-BTS Group seeks $2.1 bln in Thailand's largest IPO

Fri Mar 15, 2013 5:58am EDT

* IPO to be priced on April 5, listing set for April 19

* 20 cornerstone investors agree to buy $850 mln of the IPO

* AIA Group, Capital Research, Azentus, Fidelity among investors

* BTS Group's profit in first 9 months of 2012/13 rose 19 pct

By Khettiya Jittapong and Elzio Barreto

BANGKOK/HONG KONG, March 15 (Reuters) - Bangkok SkyTrain operator BTS Group Holdings Pcl is seeking to raise up to $2.1 billion by listing an infrastructure fund in what could be Thailand's biggest IPO, riding a boom in Southeast Asia's second-biggest economy.

BTS Group filed a prospectus for the offer on Friday to list the infrastructure fund, saying it would launch the offer on March 29. The fund is aiming to benefit from Thailand's drive to improve the nation's public transport systems.

The IPO would be the biggest on record in Thailand, according to Thomson Reuters data going back to 1985, surpassing the previous high of $727.6 million by Thai Oil Pcl in 2004. It will also be the largest IPO in Asia excluding Japan since the $3.1 billion listing of People's Insurance Company (Group) of China's (PICC) in late November.

The offering has received commitments worth $850 million from 20 cornerstone investors, including insurer AIA Group Ltd , hedge fund Azentus Capital Management and global asset managers Fidelity and Capital Research and Management, a source with direct knowledge of the plans told Reuters.

The fund is offering 5.79 billion units in an indicative range of 10.4-10.8 baht each, making the total deal worth up to 62.5 billion baht ($2.11 billion), the prospectus showed. The final pricing is due April 5 and the fund would debut on April 19, the prospectus showed.

The fund will likely yield between 6 percent to 6.2 percent, added the source, who was not authorized to speak publicly on the matter.

BTS is the operator of Thailand's first mass-transit line, which runs through Bangkok's residential and commercial areas. It also has interests in property development and investments along the routes.

Under the terms of the listing, the fund will own the net farebox revenue generated from the SkyTrain network, which has 23.5 kilometres of rail lines. The revenues from the SkyTrain core network jumped 21.2 percent in the fiscal year ended March 2012 from 2011 to about 4.3 billion baht.

The listing comes after Thailand enjoyed its busiest year for IPOs in 18 years in 2012 after investors flocked to Southeast Asian offerings. The boom in new listings in Thailand, Malaysia and the Philippines has helped investment banks compensate for a drop-off in larger Asia-Pacific markets like Hong Kong, China and Singapore.

Thailand's benchmark share index is up about 15 percent this year, making it Asia's third-best performer behind Japan and Vietnam. That comes on the back of last year's 36 percent jump.

Companies including the local unit of Tesco Plc raised about $1.37 billion in IPOs in Thailand in 2012, putting new issuance volume at the highest since the $2.64 billion raised in 1994, according to Thomson Reuters data.

The Thai government has launched a massive expansion of Bangkok's mass-transit system and aims to expand it more than six times with 508 kilometres of lines by 2029, from 79.5 kilometres now. The bulk of the expansion is planned for 2017, when about 146.1 kilometres of new lines are set to start running.

The four lines that BTS Group plans to bid on would require nearly $4.35 billion of investments, with bidding slated for 2013 and operations starting in 2017. Its interest in the lines comes mainly because they have a direct connection to the SkyTrain network and would feed passengers into that network.

For the first nine months of the 2012-13 financial year, BTS made a net profit of 2.09 billion baht, up 19 percent from the same period a year earlier. Its fiscal year runs from April to March.

BTS has said it will buy one-third of the fund units on offer with total proceeds from the IPO set aside to invest in new projects.

Morgan Stanley, Phatra Securities and UBS were hired as joint bookrunners for the IPO.

Over the past 12 months, BTS shares have risen 88 percent, outperforming a 36 percent gain of the overall market.

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