True Corp hunting for SEA partner

Dylan Bushell-Embling
07 Mar 2014
00:00

Thailand's True Corp is on the hunt for a foreign partner to help the operator expand into more Southeast Asian markets.

True CEO Suphachai Chearavanont toldReuters that the company will offer potential partners a chance to acquire around a 25% of True Corp via an equity issue.

He said the company hopes to attract 100 million customers in the SEA region within five years – five times its subscriber base in Thailand.

True is aiming to finalize the terms of a potential mobile joint venture with Myanmar ISP Yatanarpon Teleport (YTP) within the next two months.

Under the proposed deal, the joint venture would apply for a 15-year mobile license in Myanmar, and would compete with Telenor and Ooredoo in providing mobile services to the underserved market.

Credit ratings agency Moody's has separately announced it has downgraded its ratings for both True Corp and mobile unit True Move to Caa1, with a negative outlook.

"The rating actions reflect True Corp's vulnerable business and financial profile, despite the company having lowered its debt levels by selling assets to the infrastructure fund that it established in the fourth quarter of 2013,” Moody's assistant vice president Yoshio Takahashi said.

He said Moody's is projecting that True's negative free cash flow will total around 20 billion baht ($620.4 million) in 2014, due to weak mobile earnings, ongoing investments in 3G and 4G and the potential additional costs of acquiring spectrum in the upcoming auctions.

True Corp will have to implement “major restructuring and recapitalization measures” to improve its operating and financial profile, making an upgrade of True Corp's ratings “unlikely in the near term,” Moody's said.

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