Aug 7, 2013

F&N asset restructuring; laying of groundwork?

According to CIMB, two possible scenarios are;
1. F&N sells property arm to TCC, valued at S$7.7bn excluding any discount to value. TCC can afford this by paying back its 61.7% stake in F&N worth S$8.5bn. F&N becomes a pure F&B company with Thai Bev holding the majority of shares. Oishi and Serm Suk will then be injected into F&N.

2. F&N sells F&B business to Thaibev, estimated between S$2.7-2.8 bn. Thaibev can afford this by paying back its 29% stake in F&N worth S$3.6bn. Thaibev will no longer be exposed to property and have all F&B interests housed under one entity, easier to derive synergies.

As I was reading the local Bangkok Post yesterday, I saw an announcement by Krung Thai Asset Management (KTAM) which said that real estate companies controlled by Khun Dhanin's Charoen Pokphand Group and Khun Charoen's TCC Group are poised to mobilise 27.5 bn baht (~S$1.15 bn) in selling separate property funds to the public.

CP Land is planning an IPO for a 10 bn baht leasehold property fund, which will invest in Fortune Town, CP Tower (Silom) and rental offices on Phaya Thai Road.

TCC Group is planning to increase the size of its Thai Retail Investment Fund to about 20 bn baht from 2.5 bn baht.

KTAM is the fund manager for both funds and expects fund raising to be completed by the end of this year. KTAM will also be fund manager for another property fund to be launched soon that will invest in a five-star hotel worth 18 bn baht. Current projects in the pipeline for KTAM include negotiations to manage infrastructure funds worth 2 bn baht to invest in recycled energy.

Chief Executive of KTAM, Khun Somchai, expects his company's AUM to hit 500 bn baht at the end of this year.

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