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Shin to sell more of AIS to Singtel

Nov 08. 2011
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Shin Corp will sell 61 million ordinary shares of its flagship Advanced Info Service to AIS's foreign strategic partner, Singtel Strategic Investments, in a deal worth about Bt7 billion. According to DBS Vickers (Thai), the deal will not have any impact

The deal should generate positive sentiment, as it indicates that Singtel has confidence in AIS, Thailand’s largest cellular operator with more than 32 million subscribers, said DBS Vickers.

All Thai cellular operators are waiting for the National Broadcasting and Telecommunications Commission to auction the long-awaited 3G spectrum licences. The auction is expected to take place within a couple of years.

According to Shin’s filing to the Stock Exchange of Thailand yesterday, its board on November 4 approved the company’s sale of 61 million ordinary shares of AIS, representing 2.05 per cent of the combined issued and paid-up capital, to Singtel.

Singtel currently holds 21.27 per cent of AIS shares. After the transaction, Shin will still be the AIS major shareholder with a holding of 40.45 per cent, while Singtel will hold 23.32 per cent.

Shin has insisted that it will maintain its investment policy in AIS following the share sale.

Singtel and Shin have the same indirect major shareholder, which is Singapore’s state investment arm, Temasek Holdings.

The transacted share price will be based on the 20-day volume weighted average price of AIS shares prior to the Shin extraordinary general meeting of shareholders, scheduled for December 14. However, the price shall not be less than Bt119 and not more than Bt130 per share, the company said in its filing.

Shin share price rose 5.52 per cent to Bt38.25 yesterday, while that of AIS closed 1.48 per cent higher at Bt137.

Shin will receive cash, before the deduction of related expenses, from the transaction of between Bt7.259 billion and Bt7.93 billion, with a relative profit of between Bt6.833 billion and Bt7.504 billion against its cost of AIS shares of Bt6.97 apiece.

The company will not incur tax on capital gains from the share-sale transaction as it has a remaining tax loss carried forward.

Shin will consider utilising the proceeds from the transaction for potential investment yielding attractive returns and/or paying out the profit from the sale of AIS shares as an extra interim dividend to Shin shareholders. Payment of the latter will be proposed to a board meeting subsequent to the completion of the transaction, the company’s statement said.

In the case that Shin pays out all profit from the sale as extra interim dividend, the amount paid will be Bt2.13 to Bt2.34 per share.

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