(Thai) Government pursues plan to buy Thaicom

Bangkok Post

The Thai government is proposing to buy Thaicom Plc from Singapore-based Temasek Holdings to avoid future conflicts stemming from the use of the company’s satellites to air anti-government broadcasts, according to an industry source.

Finance Minister Korn Chatikavanij and Sirichok Sopha, the prime minister’s secretary, flew to Singapore in mid-April as political protests were escalating to meet Temasek executives with two proposals, said the source, who asked not to be named.

Mr Korn reportedly asked Temasek, as the major shareholder of Thaicom parent Shin Corp, to co-operate with the Thai government to stop the red-shirt protesters’ People Channel (PTV) from broadcasting inappropriate programmes via Thaicom.

Temasek agreed and referred the matter to the Thaicom board, and subsequently the PTV broadcasts were blocked, the source said.

Thaicom was founded by fugitive former prime minister Thaksin Shinawatra, who currently faces terrorism charges linked to the 10-week protests by the United Front for Democracy against Dictatorship. His family sold its holdings in Shin Corp to Temasek in January 2006.

Mr Korn also made a second proposal, asking Temasek if it would be possible for a Thai state enterprise, either MCOT or CAT Telecom, to take over Temasek’s indirect investment in the satellite operator.

However, the source said, there has been no follow-up because Temasek at the time was making management changes in its telecom portfolio.

The Thai government is still pursuing the idea under a government-to-government deal, which could result in changes in the terms for the remaining 12 years of Thaicom’s concession, or even a new satellite concession.

The source said that if the deal was successful, Thaicom would in effect become a state enterprise and the government would find it easier to regulate satellite broadcasting.

Shin Corp executive chairman Somprasong Boonyachai said he was aware of the government proposals but was not involved in any talks directly.

But he said that if the government had a proposal that was positively received by Shin’s major shareholder, it would be welcomed.

“If they can settle this deal, it will be a good thing because it will erase all issues that have annoyed both Thaicom and the government,” he said.

He said it was not clear whether a takeover would involve a tender offer for shares of SET-listed Thaicom. As well, the impact on Thaicom executives and staff was unclear.

A high-level executive of Thaicom said that although the government was attempting to find a new player in the satellite industry, it was not easy because the industry is highly competitive with low margins.

“I still have a strong belief that building and launching a new satellite can be done only by Thaicom and the military,” he said.

Thaicom has three satellites in orbit: Thaicom 2 which will expire in a few months, Thaicom 5, a replacement for Thaicom 3 which was deorbited; and iPSTAR or Thaicom 4.