Fu­ture Fund edges closer with fil­ing for long-awaited IPO


The Nation - - BUSINESS -

THE long-de­layed Thai­land Fu­ture Fund (TFF) has taken a step closer to launch with a reg­u­la­tory fil­ing for an ini­tial public of­fer­ing (IPO) of units in the in­fra­struc­ture fund.

The of­fi­cials be­hind the fund on Wed­nes­day sub­mit­ted an ap­pli­ca­tion for the IPO to the Se­cu­ri­ties and Ex­change Com­mis­sion (SEC) af­ter the orig­i­nally en­vis­aged fundrais­ing time­line had been pushed back.

The pro­ceeds of the flota­tion will be used to fi­nance the con­struc­tion of ex­press­ways.

Pra­pas Kong-Ied, di­rec­tor of the State En­ter­prise Pol­icy Of­fice (Sepo), said that the TFF forms part of the gov­ern­ment's al­ter­na­tive fi­nanc­ing sources for the coun­try's in­fra­struc­ture de­vel­op­ment through public of­fer­ings, which will help speed up fund­ing and lessen the gov­ern­ment's fis­cal bur­den.

Chan­vit Nak­bu­ree, Sepo deputy di­rec­tor- gen­eral and spokesman, said that about 45 per cent of fu­ture rev­enue will come from the Cha­long Rat Ex­press­way ( Ram In­tra- At Narong) and the 55- kilo­me­tre Bu­rapha Withi Ex­press­way (Bang Na- Chon Buri) for 30 years, owned by the Ex­press­way Au­thor­ity of Thai­land (Exat).

These projects would be backed by the fund's units.

The long- promised fund was sched­uled to make an ini­tial public of­fer­ing in March last year un­der an ear­lier sched­ule.

The gov­ern­ment aims to tap pri­vate­sec­tor fi­nanc­ing and use it to bol­ster eco­nomic growth.

The Cab­i­net in May last year ap­proved a plan to use the two ex­press­ways as un­der­ly­ing as­sets for the TFF.

Pre­vi­ously, Pra­pas said that the Min­istry of Fi­nance aimed to raise Bt45 bil­lion through the fund’s IPO from the gen­eral public and, af­ter that, the re­main­ing fund units would be placed to in­sti­tu­tional in­vestors in­clud­ing in­sur­ance firms, the So­cial Se­cu­rity Fund and the Gov­ern­ment Pen­sion Fund.

Sudthisak Wat­tanavinid, deputy gov­er­nor and act­ing gov­er­nor of Exat, said that the pro­ceeds of the IPO will be used to fi­nance the two ex­press­ways link­ing Bangkok to the west and the east.

Pra­pas said that the Fu­ture Fund was likely to launch its IPO to the gen­eral public soon af­ter it gains ap­proval from the SEC.

The units will be of­fered to gen­eral in­vestors through a small lot first, ac­cord­ing to the SEC’s re­quire­ments.

Light rail for Khon Kaen

In other in­fra­struc­ture de­vel­op­ments, Khon Kaen prov­ince is await­ing a key meet­ing of the Com­mis­sion for the Man­age­ment of Road Traf­fic, which will be chaired by Deputy Prime Min­is­ter Somkid Jatusripitak in Septem­ber.

The meet­ing will con­sider the first phase of Khon Kaen's smart city project, for con­struc­tion of a 22.6-kilo­me­tre light-rail line from Sam­ran to Tha Phra at a cost of about Bt30 bil­lion, ac­cord­ing to a di­rec­tor of Khon Kaen mu­nic­i­pal­ity.

If the com­mis­sion de­cides to au­tho­rise the lo­cal mu­nic­i­pal­ity to own the project, the next step will be for Khon Kaen Tran­sit Sys­tem Co Ltd (KKTS) to hire a fi­nan­cial ad­viser for fund-rais­ing on the stock ex­change on ex­pec­ta­tion to mo­bilise funds through an in­fra­struc­ture fund this year.

KKTS is a joint ven­ture, ap­proved by the Min­istry of In­te­rior, that would see five mu­nic­i­pal­i­ties in Khon Kaen prov­ince op­er­ate the trans­port project in the prov­ince’s Mueang Khon Kaen dis­trict.

The mu­nic­i­pal­i­ties are Khon Kaen City, Sila, Mueang Kao Sub­dis­trict, Sam­ran Sub­dis­trict and Tha Phra Sub­dis­trict.

If the com­mis­sion makes a clear de­ci­sion to al­low Khon Kaen to be the project owner, the com­mis­sion will ad­just the mass trans­port sys­tem plan in prov­inces such as Nakhon Ratchasima, Khon Kaen, Chi­ang Mai, Pit­san­u­lok and Phuket, the Khon Kaen mu­nic­i­pal­ity of­fi­cial said.

“We (Khon Kaen) are cleared to in­vest by our­selves. As planned, we will raise funds this year and start con­struc­tion late in the year. The project is ex­pected to be com­pleted by2022," he said.

One light- rail route from the north to the south of Khon Kaen is fore­cast to yield an eco­nomic in­ter­nal re­turn rate (EIRR) of 12.56 per cent, less than for the start of all five routes' EIRR at 21.67 per cent.

Khon Kaen's light- rail tran­sit project will help boost the prov­ince’s eco­nomic ac­tiv­i­ties and peo­ple's in­come, said Kem­chat Som­chai­wong, the chair­man of the Khon Kaen Cham­ber of Com­merce. Khon Kaen's gross provin­cial prod­uct (GPP) is listed at work­ing out at an av­er­age of Bt190,000 per per­son a year.

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