TFF LISTING PLAN

Sepo will push for Thailand Future Fund’s initial public offering to be held the fourth quarter to bolster investment sentiment.

The State Enterprise Policy Office (Sepo) will push for the Thailand Future Fund’s (TFF) initial public offering (IPO) to be held the fourth quarter to bolster investment sentiment in the domestic market.

Speeding up sales of the first batch of TFF could help restore the private sector’s confidence, propelling investment in state infrastructure projects, but it requires waiting for the right timing, said Ekniti Nitithanprapas, director-general of Sepo.

He said the appropriate period for the IPO is after October, but it should not be close to Christmas as investors are not in the mood for investment that time of year.

Last week the cabinet approved a proposal to use two expressways as underlying assets for TFF. Under the proposal, 45% of future revenue from the Chalong Rat Expressway (Ram Intra-At Narong) and Burapha Withi Expressway (Bang Na-Chon Buri, owned by the Expressway Authority of Thailand (Exat)), will be backed TFF units.

Proceeds from the first lot of TFF’s IPO will be used to finance construction of the expressway linking Rama III Road-Dao Khanong and the Western Outer Ring Road, worth 30.4 billion baht, and the third stage of the long-delayed northern expressway linking the Kasetsart intersection and Nawamin Road, also known as the N2 section, valued at 14.4 billion.

A source at the Finance Ministry said Exat will need to draft a 30-year contract that will be scrutinised by the Office of the Attorney General. After a contract is completed, Sepo will submit TFF’s filing to the Securities and Exchange Commission before launching book building to gauge institutional investor interest.

To build investor confidence, the Finance Ministry will invest 1 billion baht in TFF with the option to pour another 9 billion into the infrastructure fund.

The cabinet in December approved the launch of the TFF to raise liquidity from the public for the construction of massive state infrastructure projects, lowering the government’s fiscal burden. Even though public debt is still below the 60% ceiling, the government must seek other funding sources for its big-ticket infrastructure projects.

Public debt stands at 43% of GDP, meaning there is only 2.6 trillion baht left before reaching the threshold.