UPDATE 1-True Corp $1.8 bln fund IPO sidesteps Thai market gloom
* Telecoms provider lands second-biggest Thai IPO this year
* Fixed-asset fund's stability offsets market jitters
* Success seen stoking demand for infrastructure fund IPOs
By Khettiya Jittapong and Manunphattr Dhanananphorn
BANGKOK, Dec 19 (Reuters) - True Corp Pcl, Thailand's largest full-service telecoms company, has pulled off the $1.8 billion sale of a fund housing its infrastructure assets, skirting a market slide to land the second-biggest Thai initial public offering of 2013.
The 58.08 billion baht sale of a package of fixed assets like telecoms towers and cables helped True's infrastructure fund absorb market jitters over domestic political tension. While the Bangkok stock market has sagged to a near-three month low, True's success may whet an appetite for similar Thai IPOs, market watchers said.
Demand for the deal crafted by True, controlled by Thai billionaire Dhanin Chearavanont, exceeded the amount offered, people familiar with the deal said on Thursday after the subscription period closed at 0500 GMT.
The sale will allow loss-making True to cut debt racked up in an expensive expansion of 3G mobile networks over the last three years.
"Political factors have been digested at some point, while investors have more choices to invest in infrastructure funds which offer stable returns," Suradech Kietthanakorn, senior vice president at Kasikornbank PCL, told Reuters.
Watching on in the deals pipeline are companies like Internet service provider Jasmine International Pcl, state-owned power producer EGAT and solar farm maker SPCG Pcl . Jasmine has said it aimed to raise 60-70 billion baht from an infrastructure fund IPO.
The domestic political turmoil that squeezed shares in recent months had also prompted several companies to hold off on share sales. While True pressed on with the sale of its fund - called True Telecommunication Growth Infrastructure Fund - it scaled back its fund-raising target from the maximum of 80 billion baht it originally envisaged.
This month, the real estate group controlled by billionaire Charoen Sivivadhanbhakdi and Central Pattana Pcl, Thailand's largest shopping mall developer, both postponed their property fund offerings citing unfavourable market conditions.
True, majority-owned by Dhanin's Charoen Pokphand Group, had offered 5.8 billion units of the fund at a fixed price of 10 baht per unit. The offer period was extended for three days to give investors more time to invest in the country's second listing of that type of fund.
True's was priced to return a yield of 8.8 percent in 2014. This compared with a yield on the benchmark 10-year Thai government bond of 4.06 percent and an average 6.1 percent yield on real estate investment trusts (REITs) traded in Singapore.
Assets to be transferred to the fund included 6,000 telecoms towers, fibre optic cable and provincial broadband networks, as well as the right to receive rental fees.
True will own about 18 percent to 33 percent of the fund after it is listed on Dec. 27.
"The deal is done and it is oversubscribed. They got more money than the amount offered and they are finalising details," a source told Reuters. "They need to work on cheque clearing to decide how much excess demand is and how much of the fund True will own."
Those proceeds will be welcome. With a net debt of $3.4 billion, True is the second most-indebted telecoms firm in Southeast Asia after Singapore Telecommunications Ltd, which had net debt of $6.03 billion at the end of the September quarter, according to Thomson Reuters StarMine.
True's debt growth has matched the expansion of its mobile networks to compete with cellular market leader Advanced Info Service Pcl and second-ranked Total Access Communication Pcl. It is the only carrier among the three that does not have a foreign partner.
Credit Suisse Group AG and Siam Commercial Bank PCL were the joint global coordinators for the offer. Bank of America Merrill Lynch and UBS AG were joint bookrunners. ($1 = 32.3000 Thai baht) (Additional reporting by Saeed Azhar in SINGAPORE and Tripti Kalro in BANGALORE; Editing by Kenneth Maxwell)
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