Capital Research, GIC investing in Thailand's Central Retail IPO

BANGKOK/SINGAPORE (Reuters) - Thailand’s largest retailer, Central Retail Corp, said Singapore sovereign wealth fund GIC and funds advised by U.S. investor Capital Research Management Company are among international cornerstone investors backing its IPO, worth up to $2.4 billion.

The IPO, first announced in July, comes after Thailand took the top IPO ranking in Southeast Asia in 2019 with $4 billion in fundraisings, according to Refinitiv data. A slew of large issues are in the pipeline for this year.

Central Retail, controlled by the billionaire Chirathivat family’s Central Group, will use the funds to partly repay debt and expand the business in Thailand and overseas, company officials told a news conference on Friday.

“In the next decade in Thailand... we will be proactive with partnerships and M&A,” Central Retail CEO Yol Phokasub told reporters.

The IPO from the retailer, which is also delisting its subsidiary Robinson Pcl ROBINS.BK and offering a share swap to Robinson's existing shareholders, will be the country's biggest.

Central Retail said the IPO was being launched at a price band of 40-43 baht ($1.32 - $1.41), narrowing this from an indicative 40-48 baht range. It is offering 1.33 billion primary shares and 360 million secondary shares in total in the IPO and the tender offer and an overallotment of 169 million shares.

The share swap with Robinson shareholders will be worth at least 34.1 billion baht ($1.1 billion).

International cornerstone investors are buying shares for a total of $532 million, while domestic cornerstone investors including Kasikorn Asset Management and Aberdeen Standard Asset Management are buying shares worth a total of $265 million.

“Central Retail is currently in an expansion phase, so there is a lot of revenue and operating profit growth over the next few years,” said Oshadhi Kumarasiri, an equity analyst at LightStream Research, who writes on Smartkarma platform.

“Central Retail will get strong support from both buyside and retail investors,” said Kumarasiri, noting that institutional investors would like the company’s earnings stability, strong balance sheet and stable operating cash flows.

Central Retail will set the final IPO price before Feb. 5, and the share are expected to list on Feb. 20.

Morgan Stanley, Credit Suisse, and UBS are the international co-managers while Bualuang Securities, Phatra Securities and Kasikorn Securities are the domestic underwriters for the issue.

Books for institutional investors will open on Jan. 20 and close on Feb. 3.

CRC will have market capitalization of at least 241.2 billion baht.

Reporting by Chayut Setboonsarng in Bangkok and Anshuman Daga in Singapore; Editing by Alex Richardson