ShinCorp/ShinSat

[Wisarut]

Than Setthakij has conformed that both Temasek and Crown Property Bureau (Siam Commercial Bank PCL) DID takeover Shin Corp through 49.6% shares for Temasek and 5-10% for SCB.

Crown Property Bureau (Siam Commercial Bank PCL) has sent Khun Phongse Sarasin (son of former PM Poj Sarasin - he used to run Thai Pure Drink PCL (Thai distributor for Coca Cola)) and Dr. Wijit Suraphongsechai from SCB to run ShinCrop.

Initally SingTel and SCB want to buy ShinCorp at 30 Baht/Stock ... so PM Thaksin Suspended the Deal until he got the right prices. Even worse, Khun Chumphon Na Lamliang (former Siam Cement PCL General Manager - now run as the head of SingTel (Thailand)) said he OBJECT SingTel Plan to run ShinCorp. ... SO, Temasek has got the way ...

Details on the deal:
Shinnawatra-Damaphoingse Families: 1.158 Billion Stock whcih can be broken down as follows:
1) Miss Phinthongtha Shinnawatra -> 440 million Stock => 14.92%
2) Mr Banjaphot Damaphongse -> 404 million Stock => 13.71%
3) Mr. Phanthongthae Shinnawatra -> 293 million Stock => 9.96%
4) Miss Yingrak Shinnawatra -> 20 million Stock => 0.68%
5) Ms. Bussaba Damaphongse -> 0.1598 million Stock => 0.01%


UBS AG (Singapore): 0.297 Billion stocks
Total: 1.456 Billion Stock - 49.6% of registered capital = 72.8 billion Baht ->
the biggest transactions sicne the first day for Thai Stock Market at 30 July 1975.

Buyer: Temasek Funds
Price: 49.50-50.00 Baht/stock -> all in CASH (!)
No Stock Swapping


Even though the sell are supposed to pay 15% Tax to Revenue Dept, Khun Thanong Phitthaya insists that this massive transaction is NOT subjected to tax collection due to Thai-Singapore Treaty for Taxing from capital transaction. If Temasek DID pay the tax to Singaporean Revenue Dept at least 15% of payment, the tax to Thai Revenue Dept is Exempted.

Temasek has intended to KEEP Only AIS while Temasek woudl sell ITV to Grammy Entertainment PCL and ShinSat woudl be back to the Shinnawatra family.

[Tettyan]

So this is how Temasek intends to get around the foreign ownership restrictions.

So here's the next question. Who controls Temasek's alleged local partner (other than SCB), Kularbkaew Co? Crazy how the Nation mentions them without being able to give any background! Anyone have any idea?

http://www.nationmultimedia.com/2006..._19721825.html

Originally Posted by The Nation

SHIN SALE: Two Thai banks to fund deal
The Nation
Published on January 23, 2006

SEC to be told today of Temasek’s purchase backed by local loans of Bt26 billion. Siam Commercial Bank and Bangkok Bank will each extend Bt13 billion in fresh loans to a subsidiary of Temasek Holdings of Singapore, as part of Bt70-80 billion in cash required to take over Shin Corporation Plc, financial sources said yesterday.

Financial sources said Bangkok Bank’s Bt13-billion loan to Cypress Holdings would come in the form of a standby letter of credit guaranteed by Siam Commercial Bank.

Altogether the two Thai banks will be lending a combined Bt26 billion as part of a financing package for the largest corporate takeover ever in Thailand.

Shin Corp is expected to notify the Stock Exchange of Thailand today, followed by a news conference.

Financial sources identified the Siam Commercial Bank as one of the key players behind the Shin deal, providing financial advice and the loan to Cypress Holdings, a subsidiary of Temasek Holdings.

Cypress Holdings then will re-lend the money it gets from the Thai banks to Cedar Holdings, which will use the money as part of its Bt70-80 billion takeover of the 49.6 per cent stake in Shin Corp from the Shinawatra and Damapong families.

“If Cypress Holdings is a son company of Temasek, you can say that Cedar Holdings is a nephew company of Temasek,” said one financial source.

ML Chayothid Kritdakara, managing director of SCB Securities, has been identified as a key adviser for the mega-deal, which will reshape the face of Thailand’s corporate scene.

According to Krungthep Turakij’s Saturday edition, there are 10 shareholders in Cedar Holdings, with Siam Commercial Bank hold?ing about 10 per cent, Kularbkaew Co 41.1 per cent and Cypress Holdings 48.99 per cent.

Apparently, Temasek’s buying into Shin Corp would breach the foreign ownership limit of 49 per cent, which has prompted it to rely on its subsidiary Cedar Holdings, incorporated in Thailand, to do the buy-out. The shareholders in Cedar are largely nominees for Temasek.

Around 49 per cent of total Shin shares are “free floating” and avail?able in the local market, and most of these are expected to be snapped up by the foreign investment group.

With the sale of the Shinawatra and Damapong families’ majority stake in Shin Corp to be announced today, critics of Prime Minister Thaksin Shinawatra are sharpening their knives – over a deal they believe would raise more questions about conflicts of interests.

Shin will call an urgent meeting of its board at midday before mak?ing a filing to the Stock Exchange of Thailand. A joint press conference with Temasek executives will be held in the afternoon at a location yet to be confirmed, a source at the Thai conglomerate said.

The families of Prime Minister Thaksin Shinawatra and his in-laws jointly own a 49.6-per-cent stake in Shin which Temasek is expected to buy at a price of about Bt50 per share, totalling between Bt70-80 billion. Shin Corp has 3,000 million shares outstanding.

Temasek will also stage a tender offer for minority shares of Shin and its flagship company, mobile phone operator Advanced Info Service Plc (AIS).

The biggest deal in the Thai stock market history has been shrouded in secrecy and controversy, and Thaksin and market authorities have come under fire over the past month for lack of transparency about the imminent transfer of a major Thai asset to foreign hands.

Questions about tax and whether the Shinawatra and Damapong families would stack the staggering amount of money earned from the sale overseas are also likely to become a major polit?ical issue.

Despite suggestions that the Temasek deal was aimed partly at easing criticism of Thaksin over conflict of interests, his opponents insist that the opposite could hap?pen.

“Let’s see when the dust settles,” leading social critic Thirayuth Boonmi said during a press confer?ence yesterday when he continued to denounce “massive corruption” among top government politicians and their cronies. “The first key question is where they keep they money [from the sale] and how.”

The Campaign for Media Reform warned that the problem of conflicts of interests could become even “more complicated and scari?er” with key foreign players involved.

In a statement yesterday, the organisation attacked stock market authorities and the PM for failing to protect national interests affect?ed by the mega deal.

Meanwhile, the Shin Corp source said a Chinese telecom group had offered the families a better price than Temasek but they finally opted for the Singaporean suitor.

He said Temasek would have newly created affiliate, Cedar Holding, to hold the shares it buys from the families and would later try to project that Shin is still a Thai-owned company.

While Temasek had Goldman Sachs as its financial adviser in the deal, the families have not hired an adviser but scrutinised the deal themselves, the source added.

The source said Pong Sarasin, former chairman of Thai Pure Drinks and Surathip Group, would replace Bannapot Damapong, elder brother of Thaksin’s wife Pojaman, as Shin chairman.

There is also expected to be a new chairman at AIS, a post currently held by Paiboon Limpaphayom.

The source said Temasek was interested only in AIS and would gradually sell off Shin’s other major businesses, including free-TV operator iTV Plc and budget airline Thai AirAsia.

Shin’s also has a satellite service and broadband Internet business.

Telecom, Political Reporters

The Nation

[Tettyan]

Press Release from the Stock Exchange of Thailand's website:

http://www.set.or.th/set/newsdetails...US&language=en

Originally Posted by Stock Exchange of Thailand

January 23, 2005

Re: Notification of resolution of the Board of directors
meeting no. 1/2006

To: President
The Stock Exchange of Thailand

Shin Corporation Public Company Limited ("the Company")
held the Board of directors meeting no. 1/2006 on January 23, 2006
at 11.00 a.m. to consider the business plan of the company for
the year 2006 as ordinary. In addition to the said agenda,
during the meeting the Company has been informed by the major
shareholders, which are comprised of Miss Pintongta Shinawatra,
Mr. Bhanapot Damapong Mr. Phantongtae Shinawatra, Miss Yingluck
Shinawatra and Mrs. Busaba Damapong, that they had sold their
shares of the Company to Cedar Holdings Limited ("Cedar") and
Aspen Holdings Limited ("Aspen") in the amount of 1,487,740,120
shares, equal to 49.595% of paid up capital of the Company,
on January 23, 2006 at the price of 49.25 per share including
Cedar and Aspen have informed the Company regarding the details
of shares purchase from the major shareholders. The meeting
has urgently considered regarding the purchase and sale of
the company's ordinary shares by major shareholders as follows:

1.Acknowledged the sale of the company's ordinary shares by major
shareholders with the following details,

Shareholders amount % of paid up capital
Miss Pintongta Shinawatra 604,600,000 20.15
Mr. Bhannapot Damapong 404,430,300 13.48
Mr. Phantongtae Shinawatra 458,550,220 15.29
Miss Yingluck Shinawatra 20,000,000 0.67
Mrs. Busaba Damapong 159,600 0.005
Total 1,487,740,120 49.595

As a result of this transaction, Cedar and Aspen are obliged to make
a tender offer for all securities of the Company according to the
Notification of the Securities and Exchange Committee No. Gor
Jor. 23/2545 Re: Rules Condition and Procedure for the Acquisition
of Securities for Business Takeovers.

The primary information of Cedar and Aspen as follows;

Cedar
1) Name of directors and authorized signatories
1. Mr. S Iswaran
2. Ms. Tan Ai Ching
3. Ms. Chai Yue Joo
4. Mr. Bodin Asavanich

Authorized signatories are "1. Any two of directors can sign jointly with
affixing the Company's seal. 2. One director can sign with affixing the
Company's seal on the required documents which need to submit at the
Ministry of Commerce and the Revenue Department"

2) Name of major shareholders
1. The Siam Commercial Bank PCL holds 9.9 % of the
registered capital

2. Kularb Kaew Company Limited holds 41.1 % of the
registered capital

3. Cypress holdings Limited holds 48.99 % of the
registered capital

Aspen: 1. Anderton Investment Pte. Ltd. Holds 99.94 % of the
registered capital

continued....

[Tettyan]

...continued from previous post

Originally Posted by Stock Exchange of Thailand

...

3) Registered capital is Baht 400,000,000


Aspen

1) Name of directors and authorized signatories
1. Mr. S Iswaran
2. Ms. Tan Ai Ching
3. Ms. Chai Yue Joo
Authorized signatories are "1. Mr. S Iswaran, Ms. Tan Ai Ching and
Ms. Chai Yue Joo, any two of these three directors can sign jointly
with affixing the Company's seal. 2. One director can sign with
affixing the Company's seal on the required documents which
need to submit at the Ministry of Commerce and the Revenue
Department"

2) Name of major shareholder is Anderton Investment Pte. Ltd.
Holds 99.94 % of the registered capital

3) Registered capital is Baht 100,000

However, in connection with the policy to join the management of
the company, the Company has not been informed from Cedar and Aspen.
If there is some more information, the Company will inform promptly.
Moreover, Cedar and Aspen has confirmed to the Company that the
Cedar and Aspen do not have an intention to delist the Company
from the Securities Exchange of Thailand ("SE") during the
12-month period after the end of the Tender Offer period unless
the Company is unable to maintain its listing status under the
regulations required by the SET or the Board of directors of
the Company deems it appropriate to propose to delist the Company.

After the Company receive the information from the major shareholders,
the meeting has consider the agenda that relevant the purchase and
sale of the company's ordinary shares by major shareholders

2. Acknowledged the resignation of Mr. Bhannapot Damapong,
Mr. Surasak Vajasit and Mr. Aaruk Chonlatanon and unanimously
approved the appointment of the following person to be new
directors of the Company.

- Mr. Pong Sarasin will hold the office of Mr. Bhannapot Damapong

- Mr. S Iswaranwill hold the office of Mr. Surasak Vajasit

- Mr. Wichit Surapongchai will hold the office of Mr.
Aaruk Chonlatanon

Moreover, in the case that Mr. Bhannapot Damapong, who holds
the Chairman of the Nominating Committee and the Chairman of the
Remuneration Committee, has resigned from such positions,
Mr. Pong Sarasin shall replace the said positions of Mr.
Bhannapot Damapong.

3. Approved the amendment of authorized signatories of the Company
to be compatible with the appointment of new directors, as follows:

"Mr. Wichit Surapongchai, Mr. S Iswaran, Mr. Boonklee Plangsiri, Mrs.
Siripen Sitasuwan, two of these four directors sign jointly together with
the compan's seal affixed"

4. Acknowledged the making of a tender offer for all securities of
the Company. As the case that the major shareholders have reported
the sale of their shares to Cedar and Aspen in the amount of
1,487,740,120 shares, equal to 49. 595 % of the paid up capital.
Cedar and Aspen are obliged to make a tender offer for all securities
of the Company according to the Notification of the Securities and
Exchange Committee No. GorJor. 23/2545 Re: Rules Condition and
Procedure for the Acquisition of Securities for Business Takeovers.
Moreover, the Company are obliged to prepare an opinion concerning
the tender offer in the form 250-2 and shall submit such opinion
to the Office of the Securities and Exchange Committee ("the Office")
and shall deliver a copy of such opinion to each shareholder within
15 business days from the date that the Company received the offer
from Cedar and Aspen. Furthermore, in preparation of such opinion,
the Company shall appoint independent financial advisor to be the
advisor who represent the shareholders and make an opinion concerning
the offer. The meeting has empowered to the Executives Committee to
consider and proposed the independent financial advisor to represent
the shareholders and make an opinion concerning the offer to the
audit committee for approval.

5. Acknowledged the announcement of Voluntary Tender Offer by informing
to the Advanced Info Service Public Company Limited ("ADVANC") at the
price of Baht 72.31 per share. In this regard, Cedar and Aspen receive
the waiver for not obliged to make a tender offer as prescribed
in Clause 8 of the Notification of the Securities and Exchange
Committee No. GorJor. 53/2545 Re: Rules Condition and Procedure
for the Acquisition of Securities for Business Takeovers
(Chain Principle) from the Securities and Exchange Committee
because of the Voluntary Tender Offer of ADVANC's shares has
compensate the Tender Offer of ADVAN's shares that will occur
in the future if Cedar and Aspen hold 50% of paid up capital
of the Company after the voluntary tender offer has made.

6. Approved that the Company not to sell any shares of ADVANC
which the Company holds 1,263,712,000 shares, equal to 42.82
of paid up capital, according to the public announcement of
Cedar and Aspen that they will make a voluntary tender offer
for ADVANC shares because the Board of Directors viewed that
business of ADVANC is able to gain major profit to the Company
and ADVANC's performance is always impressive.

7. Acknowledged the obtaining of a waiver from making chain
principle tender offer as prescribed in Clause 8 of the
Notification of the Securities and Exchange Committee No.
GorJor. 53/2545 Re: Rules Condition and Procedure for the
Acquisition of Securities for Business Takeovers (Chain Principle)
for all securities of ITV Public Company Limited ("ITV"), Shin
Satellite Public Company Limited ("SATTEL") and CS LoxInfo
Public Company Limited ("CSL"). As the Takeover Panel of Thailand
("Takeover Panel") viewed that Cedar and Aspen do not intend to
acquire the securities of ITV and SATTEL, plus, ITV and SATTEL
are do not constitute a substantial portion of the assets of
SHIN, therefore, the Takeover Panel grants a waiver from making
a tender offer for all securities of ITV and SATTEL to Cedar and
Aspen. Moreover, as the Company and SATTEL holds less than
50% of paid up capital of CSL, Cedar and Aspen are not obliged
to make a tender offer as prescribed in Clause 8 of the
Notification of the Securities and Exchange Committee
No. GorJor. 53/2545 Re: Rules Condition and Procedure
for the Acquisition of Securities for Business Takeovers
(Chain Principle) as well.

Furthermore, to provide enough time for shareholders and investors
to analyze that information prior to the subsequent trading of
shares of the Company, the Company would request the temporary
suspension on trading of the Company's shares since 14.30 to
16.30 of today.

Please be informed accordingly.

Sincerely Yours,
-Signed-
(Mr. Boonklee Plangsiri)
Director
Shin Corporation Public Company Limited

[Tettyan]

So now we have a little bit of an idea about who's behind Kularb Kaew. But their chairman says that the initial shareholders will sell off their shares soon to repay the loans needed to buy their stake in Shin. So the $64 question is - to whom do they plan to sell? Maybe I'm reading too much into this - and that this is just one step in a straightforward plan to bring more Thai investors on board, in order to comply with foreign-ownership restrictions. Or could it open the door for the Shinawatras or other politically-connected groups to buy back into the company in future? I saw some i-banker say that if that's what they planned to do, such a set-up would allow them to do so without so much public scrutiny. Since I'm not an expert on the subject, I'm not really sure what to believe.

http://www.nationmultimedia.com/2006..._19730654.html

Originally Posted by The Nation

CROSS-BORDER TAKEOVER: Two new firms pay Bt73 bn for Shin
Published on January 24, 2006

Companies with cross holdings created just weeks before purchase. Three companies involved in the takeover of Shin Corp Plc – Cedar Holdings Co Ltd, Aspen Holdings Co Ltd and Kularb Kaew Co Ltd – were hastily established in Thailand this month, showing how intense the manoeuvres have been.

“There has been discussion on this deal for some time but the talks heated up in the past six weeks,” said one of the advisers.

Cedar was established on January 17, a week before the deal was announced yesterday. Kularb Kaew was established two weeks ago while Aspen was set up last Monday.

Cedar and Aspen yesterday wrapped up the takeover to buy 49.6 per cent from the Shinawatra and Damapong families for Bt73.3 billion. Kalarb Kaew holds 41 per cent of Cedar.

According to former DBS Bank chairman Pong Sarasin, chairman of Kularb Kaew, even though the deal was sealed, Kularb Kaew could be subject to a shareholding change soon.

“Kularb Kaew was established to make Shin a Thai firm after the transactions, but I’ll soon have to sell the stake,” Pong said.

The change in shareholding structure is cited as a means to repay a Bt24 billion loan extended by Bangkok Bank and Siam Commercial Bank to help finance the share purchase. To repay the loans, Kularb Kaew will sell its shares to local investors – including financial institutions and private funds – to seek funds to repay the loans, Pong said.

Under the deal, Temasek Holdings brought in nearly Bt50 billion for the purchase, which was paid through its wholly-owned arm Aspen, while the Bt24 billion was financed by the loans.

Siam Commercial Bank president Jada Watanasiritham said that her bank’s Bt11 billion loan contained no risk as it was fully guaranteed by leading banks in Singapore.

“We have discussed this with the board and we see huge benefits from lending to the country, the telecom industry and the bank itself,” she said. Under the deal, SCB is also a shareholder in Cypress Holdings, which in turn is a major shareholder in Cedar. “This is meant to be a long-term investment,” Jada added.

Of all the Shin shares that changed hands, 38.6 per cent were bought by Cedar and the remainder by Aspen.

Kularb Kaew was co-established two weeks ago by Pong and Supadet Poonpipat, chief executive of Thanachart Bank, together with Temasek. Pong and Supadet jointly own 51 per cent in Kularb Kaew, while Temasek owns 49 per cent. The company’s total registered capital is about Bt160 million.

A financial analyst expressed doubt the Shinawatra family would set up a local fund to acquire shares in Kularb Kaew. If the family did, it would mean they would still have a controlling interest in Shin.

“Anyway, if the family did that, it would be hard to trace and that means the family’s image will remain good,” the source added.

It has been speculated that one reason for the prime minister’s family’s exit of Shin is to deflect criticism of conflict of interest, but a family representative, Suvarn Valaisathien, said yesterday that the decision of the Shinawatra and Damapong families to dispose of their combined 49.6 per cent share to the Temasek-led group was a purely business one.

He said that the families do not want to further invest in the capital-intensive telecom business.

Business Reporters

The Nation

[Scuba22]

Any investment banker worth half a damn knows full well how t get around shareholding restrictions. I can't comment on the Shin structure specifically since I don't know the details, but I can lay out the basics - it's not very complicated actually.

The key is understanding the difference between shareholding (who legally owns how many shares and therefore % of the company), management & governance (who makes decisions), and financial disbursements (where the money goes). These are not the same things, and do not necessarily need to be consistent with each other.

Shareholding is the only item which is covered by the restrictions (I believe); but in many ways, it's the governance and financial disbursements which are the important parts of the business. Suppose you own 80% of a company and I own 20%. We can still agree that I, the minority, will have a management contract to run the business as I see fit. We can further agree that my management compensation will be tied to the profits of the company. That way, the financial distribution can be totally different than the shareholding.

This is where financial structures like intermediary companies and shareholder loans come into play - essentially they're clever ways of adhering to the letter of the law while violating the spirit of it. And if anyone is excellent at doing that, it's our pal Thaksin.

All that being said, I should state that I personally believe that shareholding limits for foreigners are stupid on many counts - let me know if I need to get into this, though I suspect most people in this board feel the same way.

Cheers,

Scuba22

[The Enforcer!]

Can anyone explain the reasoning behind why no tax is being sought by the Revenue Department?

Are share transactions usually tax free?

The Enforcer!