Bangkok--23 Apr--MT Multimedia
The Digital Telecommunications Infrastructure Fund ("DIF") showcases its investment potential with the third additional investment in telecommunications infrastructure assets. DIF will offer up to 3,831 million new investment units to raise funds to invest in additional telecommunications infrastructure assets in response to growing demand for smart phone, internet and broadband usage. DIF is confident the additional investment will help to expand its service area and provide wider coverage. It also expects an estimated distribution per unit or DPU (from 1 July 2018 – 30 June 2019) to increase to be at least 1.04 baht per unit, compared with a DPU of 0.98 baht per unit in 2017 (January - December). The preliminary offering price range is set at 13.60 - 13.90 baht per unit and existing unitholders will have the right to subscribe to new units from May 2-8 (business hours only). Subscription period for general public will begin from May 2-11 (business hours only).
Mr. Smith Banomyong, the Chief Executive Officer of SCB Asset Management Co. Ltd (SCBAM) as the management company of DIF, said DIF is the first and the largest digital telecommunications infrastructure fund in Thailand. It will invest in additional telecommunications infrastructure assets with total value not exceeding 55,236 million baht by offering up to 3,831 million new units with total value of investment units issued and offered for sale not exceeding approximately 53,236 million baht and borrowing from the financial institutions up to 2,000 million baht, which was approved in accordance with the resolutions of DIF's unitholders meeting no. 1/2017, held on November 23, 2017. The aim is to invest in telecommunications infrastructure assets to help increase the competitiveness of the country and to meet the demand for smartphone, internet and broadband usage that is expanding with the change to the 4G LTE system and the installation of the 5G system in the future. It will also help drive Thailand to become a more advanced digital society in response to the government's Thailand 4.0 policy to develop the country's digital economy.
The additional investment in the telecommunications infrastructure assets no. 3 would make DIF's asset portfolio larger and enable it to expand services in all areas throughout the country and provide improved coverage. This will result in DIF having additional assets, telecommunications towers and fibre optic cables, available for leasing out to generate more revenue. At the same time DIF will benefit from the growth trend of the telecommunications industry and the Thai economy which from the period 2017-2022 is expected to see users of the 4G system increase by 14% per year. This means the number of users of the 4G system will grow as much as 76% by 2022 (according to the report of Analysys Mason) and should have the effect of increasing the demand for leasing telecommunications towers and fibre optic cables from new tenants.
Miss Veena Lertnimitr, Executive Vice President of Primary Distribution Division of the Siam Commercial Bank PLC, as the Sole Financial Advisor, the Sole Global Coordinator, the Joint Bookrunners and the Joint Lead Underwriters, said DIF will make its third additional investment in telecommunications infrastructure assets from True Group, including: 1) Ownership in 2,589 telecommunications towers used for provision of mobile services 2) Ownership in fibre optic cables (FOC) used for provision of mobile, internet and broadband internet services totalling approximately 590,305 core kilometres 3) Long-term leasehold of approximately 30 years of FOC used for provision of internet and broadband internet services of approximately 619,986 core kilometres, including call option of such FOC with an exercise price of 1,300 million baht.
In the latest development, the Office of the Securities and Exchange Commission (SEC) has approved the offer and sale of investment units, with the preliminary offering price range set at 13.60 to 13.90 baht per unit. The offering will be allocated to the existing unitholders whose names appear on the register of unitholders on record date 17 April 2018, according to their unitholding proportion (Preferential Public Offering) and to the general public, whereby retail investors shall be allotted via the Small Lot First method.
DIF has performed strongly since its inception, with distribution per unit (DPU) of 0.94 0.95 0.96 and 0.98 baht, respectively between 2014-2017. The DPU increased continuously each year consistent with an increase in the net asset value (NAV) of DIF. The NAV of DIF at year end from 2013-2017 stood at 10.0471 12.4161 12.3241 14.6191 and 15.5630 baht per unit, in the respective years.
Mr. Ekkapob Makeguljai, Executive Vice President and Team Leader, Market Sales and Product Solutions Team, Financial and Capital Market Business Division, Krung Thai Bank PLC, as the Joint Bookrunners and the Joint Lead Underwriters, said that after the third additional investment is complete, DIF will have enlarged asset portfolio composing of ownership and rights to net revenue of 15,271 telecommunication towers, ownership, long-term leasehold rights and rights to net revenues of FOC of approximately 2.6 million core kilometres, and ownership in the broadband system in the provincial areas totalling 1.2 million ports. This will increase the variety of assets and support their usage as well as increase coverage areas throughout the country. It will lengthen the weighted average maturity of the assets' lease term to approximately 20 years, resulting in revenue recognition under long-term lease agreements, which will be the fundamental for DIF to provide long-term returns to its unitholders.
DIF is confident that after its third additional investment, there will be no earning dilution effect that would negatively affect the dividends per investment unit. This is because DIF invests in assets that are readily available for benefit seeking by leasing out to the telecommunications operator to immediately generate revenue for DIF, whereby It estimates that dividend payment per investment unit (from 1 July 2018 - 30 June 2019) will increase to be at least 1.04 baht per unit, compared to the 0.98 baht of dividend payment per unit in 2017 (January – December), which will benefit the unitholders from an opportunity to receive higher return.
Mr. Prasert Deejongkit, Senior Vice President and Manager, Bangkok Bank PLC, the Joint Bookrunners and the Joint Lead Underwriters said that the capital increase will help to boost the potential of DIF because it will have a variety of telecommunications infrastructure assets to give wider service coverage for the population in all areas of the country. This is in line with the overall situation of the telecommunications industry whose trend is for continuous growth in the future which will increase interest in DIF.
DIF is also organising a roadshow to give additional information to investors on April 24, 2018 from 1:00 – 4:30 p.m. at the Sukri Kaewcharoen Hall, 3rd Floor, Building B, the Stock Exchange of Thailand. Existing unitholders who are eligible to subscribe to new units can subscribe from May 2-8 (business hours only). Subscription period for the general public will begin from May 2-11 (business hours only) at the Siam Commercial Bank, the Bangkok Bank (except micro branches) and the Krung Thai Bank, nationwide.
For general subscribers (individual or juristic entity), subscription will be at the top of the preliminary price range at 13.90 baht per unit. The final offering price will be determined after of the bookbuilding process with the institutional investors, which is expected to be announced by May 14, 2018 at the latest. If the final offering price is lower than 13.90 baht per unit or if there is no allocation of investment units in whole or in part, investors will receive a refund within 7 (seven) working days through bank transfer or within 10 (ten) working days by cheque or cashier cheque from the end of the offering period. (May 16, 2018)