ShinCorp/ShinSat

[Hitesh]

Shinee, Dtac and iTV join hands for I-News service
SIRIPHAN PONGTHANEE staff writer
Shinee, a website owned by Shin, Total Access Communication Plc (Dtac), and iTV, a subsidiary of Shin and Siam Commercial Bank Plc, join hands in launching the ‘I-News’ service which offers Dtac’s customers more media access choices, with the expectation of a 50 percent increase in existing customers’ subscriptions by the end of this year.
(Source: Business Day, September 17 2003).

FYI: Shinee and iTV are both owned by PM Thaksin Shinawarta's Shin Corp. which also owns AIS - DTac's biggest competitor.

[Tettyan]

So after months of speculation, it looks like this will become official very soon.

From my understanding, under SET rules, Temasek will have to tender for the remaining shares of Shin and AIS. But I thought the telecoms law only allows up to 49% of foreign ownership for cell phone companies. Also, I thought that there were foreign ownership restrictions on Shin Satellite and ITV. Any idea on how these issues will be resolved?

Also, I wonder what Shin's relationship with SingTel is going to be. The latter is 60% owned by Temasek, but under the US-S'pore FTA, Temasek will have to eventually sell off its majority stake in SingTel. Anyone have any clue?

Bravo to Thaksin though. He should have done this five years ago, before the market value of his holdings tripled under his regime. But better late than never. I suggest that he put the cash he gets from this deal into a blind trust, putting an end to any more potential conflicts of interest (similar to what Theresa Heinz Kerry did with her fortune). Somehow I doubt he'd ever contemplate this, but I'm open to being pleasantly surprised.


http://www.nationmultimedia.com/2006..._19704296.html

Originally Posted by The Nation

HISTORIC TAKEOVER: Temasek boss flies in to seal Shin deal
The Nation
Published on January 20, 2006

SET to be advised today of Bt2.5-trln buyout by S’pore agency; BOT notes huge capital inflow. The chief executive of Singapore’s Temasek Holdings, Ho Ching, is to appear at a news conference on Monday to announce the takeover of Shin Corp Plc, according to a telecom industry source.

Ho made a one-day trip to Thailand yesterday to add a final touch to her organisation’s imminent takeover of the Thai conglomerate. Despite her Monday date with the media, the deal is expected to be notified to the Stock Exchange of Thailand today.

A source in Singapore said she had travelled to Bangkok yesterday and returned on the same day.

Regarded as one of Asia’s most influential women, Ho is the wife of Singapore Prime Minister Lee Hsien Loong. She is in charge of Temasek, which is the investment agency of the Singapore government. According to Temasek Review 2005, the company commanded an investment portfolio totalling S$103 billion (Bt2.47 trillion) last year, up 15 per cent from the previous year.

Temasek plans to acquire 49.6 per cent of Shin Corp’s shares from the Shinawatra and Damapong families, making the Bt76-billion takeover the largest deal in Thai corporate history.

Sources said Temasek and Shin Corp have agreed on a final price of about Bt51 per share. Shin Corp has 3 billion outstanding shares.

The recent strengthening of the baht against the US dollar has been attributed to the huge amount of foreign capital flowing into Thailand ahead of the takeover transaction, the central bank said yesterday.

Bank of Thailand Governor MR Pridiyathorn Devakula said the baht’s appreciation to a nine-month high of Bt39.4 to the dollar was due mainly to the inflow of foreign capital for the purchase of Shin shares.

It is for the purchase of Shin shares, he said. “There was a broker [associated with the Shin deal] selling [foreign] currency in the market. I just learned about it today, but I don’t know how much money is involved. I don’t know how many shares they’re going to sell.”

Temasek’s buy-out of Shin Corp is part of its investment expansion into Asia. Its wealth increased by S$8.1 billion in the financial year ending March 31, 2005, including S$2.5 billion from direct investments. The latter was driven by the portfolio shift into Asia.

Temasek’s investments span from telecom and media to financial services, property, and transportation and logistics.

Shin’s businesses include Thailand’s largest cell-phone operator, Advanced Info Service Plc, the satellite operator, Shin Satellite Plc, the free TV station, iTV Plc, the budget airline, Thai AirAsia, and the personal loan provider, Capital OK.

Temasek has more than a 60 per cent stake in Singapore Telecom, which owns almost 20 per cent of AIS. The takeover of Shin Corp will make Temasek and SingTel the largest shareholders in AIS, which is the cash cow of Shin Corp.

Thaksin has been quoted as telling his executives that his family will sell off Shin Corp as part of an exit strategy to end criticism of him and his family for having conflicts of interest.

According to Tisco Research, Shin’s operations are unlikely to change following the takeover.

SingTel, a subsidiary of Temasek, has been the Shin Group’s strategic partner for many years, especially in the case of AIS. The cooperation between the two has proven to be very successful and has contributed substantially to Shin becoming Thailand’s largest telecom conglomerate," Tisco said.

AIS is Thailand’s leading mobile phone operator, with a market share of nearly 55 per cent.

Tisco Research added: “Should Temasek become Shin’s parent we do not envision any major changes to the group’s operations. This would still be the case even if some of the Shin Group’s senior management decide to leave the company as Temasek and Singtel are both highly experienced operators of telecom businesses in their own right.”

Temasek will be obliged to tender for 100 per cent of the shares in Shin Corp to complete its takeover. It will have to set aside nearly US$4 billion (Bt157.4 billion) for this.

[GWR]

It'll be interesting to see if he invests some of it in 'At Samat' Corp.

[Wisarut]

Temasek holds 49% of Shin Corps Stocks while the rest would becovered by
Crown Property Bureau - investment Manager for Royal Family

[Tettyan]

Originally Posted by Wisarut

Temasek holds 49% of Shin Corps Stocks while the rest would becovered by
Crown Property Bureau - investment Manager for Royal Family

Are you kidding? Or is this for real???

[Tettyan]

Originally Posted by Tettyan

Are you kidding? Or is this for real???

I should have known better than to question you Wiz, guess you're always right.

This Reuters article certainly sheds a little more light than earlier reports, and their analysis seems to make a lot of sense. Much info at this stage is still speculation though - wonder how to seperate facts from all the rumors?

http://in.today.reuters.com/news/new...archived=False

Originally Posted by Reuters

Thaksin share sale secret blown, deal appears done
Thu Jan 19, 2006 7:54 PM IST

By Khettiya Jittapong

BANGKOK (Reuters) - The family of Thai Prime Minister Thaksin Shinawatra will sell its controlling stake in the telecommunications empire he founded to Singapore's state investment firm, a senior banking source said on Thursday.

The source in Singapore, who is not involved in the deal, said Temasek Holdings would buy the 49 percent stake the Shinawatra and related Damapong families own in Shin Corp for "below 50 baht" per share.

Shin stock closed at 46.25 baht on Thursday and the deal was probably worth around $1.8 billion, market sources said.

The much rumoured sale of the stake in Thailand's biggest telcoms firm was confirmed earlier by Bank of Thailand Governor Pridiyathorn Devakula as he explained a sudden jump in the value of Thailand's baht currency against the dollar.

"We have not done anything. Its gain has been due to an inflow of funds for a Shin share deal," he said after the baht rose to 39.26 to the dollar, a 9-½ month high, in early trade.

"After the inflow, the baht moved normally in line with market forces," he said. By 1218 GMT, the baht had slipped back to 39.35 to the dollar.

The inflow of money meant the deal would be finalised very soon, an analyst at Capital Nomura Securities said. "Normally, money will come one day before the deal is announced," he said.

Pridiyathorn had simply confirmed a belief widespread in the market that the Shinawatra and Damapong families were close to finalising a deal with Temasek.

Shin Corp spokesmen have said almost daily for the past month they knew nothing about a deal and Thaksin has denied making an agreement with Temasek, the state investment firm, while on holiday in Singapore early this month.

"It is still the same. We have not yet been informed of anything by major shareholders," a Shin spokeswowan said on Thursday.

NO ONE CONVINCED

They have convinced almost nobody and some analysts said the delay of an announcement could be because Temasek was seeking a legal way to avoid a compulsory tender offer to buy the remaining shares in Shin and its listed affiliates.

A financial source said the Crown Property Bureau, which manages the Thai royal family's assets, might join Temasek in buying part of Shin Corp, which is capitalised at $3.5 billion on the Thai stock market.

"The bureau is interested in buying Shin Corp. They need a Thai name to prevent criticism that the families are selling a Thai company to foreigners," said the source, who declined to be identified.

The Crown Property Bureau director Chirayu Isarangkun said however, the bureau had no plan to buy a stake in Shin Corp. "The bureau has nothing to do with Shin Corp", he said.

But analysts said the Crown Property Bureau, which owns about 30 percent of Siam Cement PCL, Thailand's largest industrial conglomerate, could be a potential buyer.

Chumpol NaLamlieng, former chief executive of Siam Cement, is chairman of Singapore Telecommunications Ltd, which owns one-fifth of Advanced Info Service (AIS), the country's largest mobile phone firm under Shin Corp umbrella.

Temasek owns about 65 percent of SingTel.

Shin shares closed 1.0 percent lower on Thursday after investors shifted to property firm SC Asset Corp PCL, majority owned by Thaksin's family, dealers said.

SC Asset shares ended up 7 percent, having earlier gained as much as 15 percent, after Thai newspapers reported Thaksin's family intended to keep the company as its business spearhead.

Shin, a holding company which has more than 20 companies under its umbrella in the wireless, satellite and media sectors, would be a good target for a foreign firm wanting to get into the lucrative Thai mobile phone market, analysts say.

Shin owns 43 percent AIS, which has a 55 percent share of the domestic market.

Analysts say it is possible the Shinawatra family is considering moving into other businesses offering higher returns than a mobile phone market moving rapidly toward saturation.

A sale could also improve the image of Thaksin, often accused of shaping policy to suit Shin, charges he denies vehemently, as he fights opposition allegations of government corruption, they said.

(Additional reporting by Doreen Siow in SINGAPORE and Kittipong Thaichareon in BANGKOK)

[GWR]

This won't do anything positive for business confidence: -

Supreme Administrative Court accepts Shin Corp case


The Supreme Administrative Court ruled Thursday to accept a lawsuit seeking to cancel licenses granted to Shin Corp for communication satellites, mobile phone services and television broadcast.

The suit was filed by law lecturer Sastra Toon in March, saying Shin Corp was no longer entitled to hold the licenses because its businesses were under the control of Temasek Holdings of Singapore.

The Central Administrative Court earlier rejected the case on ground that Sastra was not a contractual party.

But the Supreme Administrative Court ruled Thursday that Sastra could file the suit in his capacity as a user of such telecom services.

The Nation

http://www.nationmultimedia.com/brea...ewsid=30015446

[Scuba22]

If anyone thought that doing business with Thaksin was free of political risk, they were fools. Any risk has downside, and this is the downside. All that's changed is perception - the risk was always there.

"Business sentiment" can be pretty stupid, and often is. It's scary that so much is dependent on it.

[jpatokal]

Originally Posted by Scuba22

If anyone thought that doing business with Thaksin was free of political risk, they were fools. Any risk has downside, and this is the downside. All that's changed is perception - the risk was always there.

Yup. This has been downplayed (hell, completely ignored) in Singapore media, but Eris Ellis has it spot on:

http://www.theage.com.au/news/busine...036414899.html

It'll be interesting to watch how this blows over if (when?) the deal is formally cancelled.

[Scuba22]

Temasek was being advised by Goldman Sachs, and given Goldman's reputation, they must have thought they were getting decent advice. Yet it's easy to see that the best minds of the best multinationals aren't usually in Southeast Asia, and the Thai contingent is usually several steps below the Singaporean contingent. It makes sense - you don't climb the corporate ladder through Thailand. If you want to make a splash in Asia, you go to Japan, China or India - and perhaps Taiwan or Korea, but Thailand? Naah.

You see people running around with fancy business cards in Thailand, yet the quality of the peoples' skills is such that they'd have a tough time in a bigger market with greater competition.

So it is with Goldman's Thai staff. First, they barely have any Thai staff - just a "representative office" in Bangkok staffed by "relationship managers" whose main purpose is to stay friendly with all major powers and decision-makers. In ordinary times, this is a fine situation. When the brains in Hong Kong come up with some idea, the local flunky can put then in front of key people; and when key people here need brains, the flunky can call Hong Kong. It works out fine - Goldman took stakes in the Dusit Thani Hotel and the Regent (now the Four Seasons) after the crash and did very well; as did its Bangkok Capital Alliance JV with GE Capital.

But you can't count on "relationship" guys to make any decent analysis - all they know is what they hear from their contacts, and if they're spending all their time with TRT cronies, they're not exactly getting decent information.

Temasek clearly got crap advice from Goldman's Thai team, and now it's going to cost them. But what does Goldman care? They've gotten their cut and now its time for the cigars. If they had any self-respect they'd hang their Thai team up to dry, but don't count on it.

Scuba22

PS = thanks for the article, very interesting!

[GWR]

Thaksin got out while he was still ahead, and while he still had enough assets to weather the current storm. So if he had the foresight and advisors to figure the right time to quit, why didn't he have the political savvy to deal with the waiverers in a more constructive manner? That surely is the mark of a truly-inspired politician?: -

Shin Corp profits sink by 60 per cent in 2006

Shin Corp, Thailand's top telecom firm that is at the centre of a political firestorm, said Tuesday its net profits fell by 60 per cent in 2006 due to huge drops in its mobile phone and satellite operations.


Shin Corp was founded by deposed prime minister Thaksin Shinawatra, but his family sold the company to Singapore's state-linked Temasek Holdings last year.

The politically explosive deal sparked months of street protests that eventually led to a coup against Thaksin in September. The deal is now the subject of a slate of criminal probes and remains a thorn in Thai-Singapore relations.

Shin Corp posted a net profit of 3.4 billion baht (95.5 million dollars) in 2006, compared to 8.6 billion baht (241 million dollars) one year earlier.

"The drop in Shin's earnings was mainly caused by a slump in the net profit of our subsidiaries," a company official said.

Profits of the group's flagship mobile firm, Advanced Info Service (AIS), dropped by 13.2 per cent to 16.25 billion baht because of lower service revenue as well as higher cost for sales and expenses.

AIS, Thailand's biggest mobile operator, saw its total revenue drop by 1.2 per cent amid a tough competitive environment, while handset sales rose 28 per cent to 15.3 billion baht.

The number of subscribers rose by 19 per cent, representing 3.1 million new subscribers, it said in a filing to the Stock Exchange of Thailand.

The group's satellite unit Shin Satellite Plc recorded a loss of 46 million baht last year, compared to a net profit of 1.33 billion baht in 2005 resulting from heavy losses due to write-off costs.

In October 2006, ShinSat took its Thaicom3 satellite out of service after it experienced a power failure and could no longer function.

Revenue at the satellite business, however, rose by 22.5 per cent to 6.85 billion baht.

Shin's broadcasting business, operated by ITV Plc, reported a loss of 1.78 billion baht in 2006 versus profits of 679 million baht in the previous year as a result of drop in revenue and rising costs and concession fees.

Concession fees for the independent television channel soared to 2.5 billion baht compared to 230 million baht in 2005, after it lost a court battle with the new military-backed government and was ordered to pay a mountain of back fees.

ITV's total revenue also dropped by about eight per cent to 2.15 billion baht due to intensified competition, political uncertainties and a general economic slowdown, the statement said.

Agence France Presse

[Scuba22]

He must have had his advisors, but I wouldn't place a lot of value on his "foresight". I mean, consider the buyer; Temasek created Singapore Airlines, SingTel, the Port of Singapore, and DBS - all highly competitive businesses in global markets with strong players, and in some cases, industry leaders. Not to mention the job that Singapore has done in developing its own country - the public housing system, mass transit, infrastructure, airport, education etc. (Singapore's PM, remember, is Temasek's head's husband; and the country was built by the PM's dad)

Now, consider Thaksin's track record in every single one of these areas - is there anything anywhere that might lead anyone to believe that Thaksin could possibly be more business savvy and astute than Temasek and the Singapore government? To belive that Thaksin has such amazing foresight, you must believe that Temsek is full of fools, and the empirical evidence is firmly against that.

IMHO, this points to two conclusions. First, Thaksin defrauded Temasek. Shin Corp values were artificially inflated through preferencial policy treatment that Thaksin knew could not be sustained once he didn't direct that policy (I suppose you could call that "foresight", insofar as knowing what you're going to do next is foresight). Second, Temasek was advised by idiots who couldn't figure any of this out. Goldman Sachs may have bright folks in major markets, but they clearly have no clue what's going on in Thailand.

Of course I can't prove any of this, but it's far more sensible than the idea that Thaksin is somehow a far better business strategist than Temasek - that's just absurd.

Cheers,

Scuba

[jpatokal]

Originally Posted by Scuba22

Now, consider Thaksin's track record in every single one of these areas - is there anything anywhere that might lead anyone to believe that Thaksin could possibly be more business savvy and astute than Temasek and the Singapore government? To belive that Thaksin has such amazing foresight, you must believe that Temsek is full of fools, and the empirical evidence is firmly against that.

No, it isn't. Temasek's rate of return averaged out over the 30 years it's been in existence is 3%, which is miserable.

[GWR]

This almost looks like part of an attempt to create distance with Thaksin as well: -

Read a full statement of HRH Crown Prince's Personal Affairs Office on MR Thongnoi Thongyai. MR Thongnoi was approached to be an advisor to Temasek Holdings' Bangkok Office.

HRH Crown Prince's Personal Affairs Office

Statement

Some press reports stated that Temasek Holdings had approached MR Thongnoi Thongyai to be an advisor for their office that would be set up in Thailand. They mentioned that MR Thongnoi Thongyai was personal secretary and advisor to HRH Crown Prince Vajiralongkorn and was assigned to take care of the royal properties since 2000.

HRH Crown Prince's Personal Office would like to announce that the reports have caused misunderstanding and confusion as the claims were false and were used as a means to establish influences for his own business benefits. The claims have caused damage not only for the country, but also instability for the international investment in Thailand.

In fact, MR Thongnoi Thongyai is a cunning man and has improper personal characters. He was not permitted to extend his term as HM's Deputy Principal Private Secretary. He then asked to be transferred to work in HRH Crown Prince's Secretary Office. HRH Crown Prince had enough mercy to employ him. He was assigned to work according to his profession - which means translating and drafting English documents and occasionally writing letters.

However, he has been tricky and cunning. He usually liked to claim and link himself to HRH Crown Prince. When he worked, he usually had hidden agenda and his works often lacked transparency. These caused dissatisfaction among his co-workers at all levels. He did not realise kindness of HRH Crown Prince who gave him opportunities for him to prove himself.

On the contrary, he took advantage and made false claims for his own benefits by setting up his positions which led him to be approached to be an advisor to Temasek Holdings. His acts were considered ungrateful and he did not realise HRH Crown Prince's kindness. They also caused damage to institutions and the country.

HRH Crown Prince's Personal Office considered MR Thongnoi Thongyai not right, improper and abusive of power for his own benefits. His acts have caused misunderstanding among the public and caused damage to the HRH Crown Prince's Personal Office. The Office thus has decided to explain and announced these facts to the public.

HRH Crown Prince's Personal Office.

[GWR]

MR Thongnoi could not be trusted : HRH Crown Prince's Secretary Office

In a strongly-worded statement, HRH Crown Prince Maha Vajiralalongkorn's secretary office has criticised press reports linking MR Tongnoi Tongyai, an official at the office, to an advisory role for Temasek Holdings and declared that Tongnoi was not a man to be trusted.

The statement has become one of the most dramatic chapters in the unfolding saga of Temasek takeover of Shin Corp that had led to the eventual downfall of former prime minsiter Thaksin Shinawatra.

In the statement, the HRH Crown Prince's Secretary Office said that Thongnoi's intention to make such claims was for his own benefits and caused damages not only for the country but for the international investment in Thailand.

It referred to earlier news reports that Temasek Holdings in Singapore had approached Thongnoi to be advisor for their Bangkok office that is going to open soon. The reports claimed that he was personal secretary and advisor to HRH Crown Prince Maha Vajiralongkorn since 2000.

The statement issued on Saturday said that the claims were groundless and were used as a channel to build up influences for Thongnoi's own benefits.

Earlier on Thursday, Temasek Holdings announced that MR Tongnoi Tongyai would not become the adviser for the company's local office in Thailand as reported.

"After thorough consideration, MR Tongnoi Tongyai and Temasek Holdings unanimously agree that MR Tongnoi will not be the adviser for Temasek's office which will be established in Thailand," Jimmy Phoon, senior managing director of the Singapore government investment arm, said in a press statement.

The announcement ends speculation that Temasek was trying to quash criticism over the morality of its investment in Thailand with the appointment of Tongnoi, who is a deputy principal private secretary to HRH Crown Prince Maha Vajiralongkorn.

http://www.nationmultimedia.com/2006...s_30017377.php