TFF poised to go public by September after review

The delayed Thailand Future Fund (TFF), an infrastructure fund, is scheduled to go public by September at the earliest, says a senior official at the State Enterprise Policy Office (Sepo).

As the fund’s initial public offering (IPO) was delayed, its details, particularly the financial information, must be reviewed, said Chanvit Nakburee, deputy director of Sepo. The agency has hired a third party to update the traffic and financial data and asked it to complete the review in two weeks.

The Finance Ministry will propose that the cabinet have clear guidelines for toll hikes on the Chalong Rat Expressway (Ram Intra-At Narong) and Burapha Withi Expressway (Bang Na-Chon Buri), which are the underlying assets of the TFF, Mr Chanvit said.

Before submitting the TFF’s IPO filing to the Securities and Exchange Commission, the fund’s launch will go before the cabinet for approval again.

Although the cabinet approved a proposal to use two expressways as underlying assets for the TFF in May 2017, the IPO process was delayed from late last year after a glitch in the amendment of the Expressway Authority of Thailand (Exat) revenue contract to transfer money to the government’s infrastructure fund.

After the issued was cleared up, the fund faced another obstacle when Exat’s labour union filed a petition to stop the fund-raising plan, contending that borrowing to refinance road construction carries cheaper costs. The Administrative Court removed the hurdle by turning down the labour union’s request.

According to the cabinet’s resolution, 45% of future revenue from the Chalong Rat Expressway and Burapha Withi Expressway, both owned by Exat, will be used to back TFF units.

The TFF 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, worth 14.4 billion baht.

Mr Chanvit said the fund mobilisation size of the TFF will depend on investor demand, but he said Sepo is set to raise 45 billion baht from the IPO.

Regarding toll hikes, he said they must be in line with contractual conditions, which stipulate that tolls be reconsidered every five years using consumer prices as a guide.