Thai unrest stalls Temasek efforts to offload Shin Corp to SingTel unit
Thailand unrest stalls efforts by Singapore state investor to sell its stake in Shin Corp
Singapore state investor Temasek is seeking to sell its US$3.1 billion stake in Thai telecommunications company Shin Corp, according to people familiar with the matter, and has approached its SingTel unit as a possible buyer.
The Temasek stake in Shin, founded by former Thailand prime minister Thaksin Shinawatra, is worth US$3.1 billion by current market value. In 2006 Temasek led a group of investors including Surin Upatkoon, a Chinese-Thai businessman, that bought 96 per cent of Shin for US$3.8 billion. Temasek did not disclose how much it paid for its holding.
The move by Temasek to sell its ownership in Shin is consistent with other attempts by the state investor to consolidate some portfolio companies. This would be Temasek's first attempt to bring part of its telecommunications operations in the region under one roof, analysts said.
However, some of its past consolidation efforts have failed to bear fruit. Last year its financial services portfolio company DBS Group Holdings made a bid for Bank Danamon Indonesia, but it failed to get approval from the Indonesian regulator.
The slowdown in deal talks for Shin makes it the second potential transaction in Thailand to be put on the back burner because of a political stalemate. ING Group's planned sale of a 31 per cent stake in TMB Bank has also hit roadblocks.
The 2006 Shin deal triggered accusations of insider trading and tax evasion as the Shinawatra family and others involved received US$1.9 billion tax-free. Thaksin insisted at the time that the sale satisfied all the rules in a country where share sales conducted through the stock market are not taxed. Protests in Bangkok followed, ultimately leading to a coup that ousted Thaksin.
Temasek owns 52 per cent of SingTel and a successful acquisition by the latter of the Shin stake would help SingTel to boost its exposure to a relatively bigger market and offset sluggish growth in mature economies.
Shin controls Thailand's biggest mobile phone operator, and has interests in telecommunications businesses including Advanced Info Service, Thailand's largest mobile phone operator, and satellite firm Thaicom.
