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China Mobile partnership lets True reduce debt

Thai operator True and China Mobile have entered into a strategic partnership that will allow True to reduce its debt.

The partnership, which will include cooperation on 4G, sees China Mobile take an 18% holding in True for THB28.6 billion ($880 million) through a private share placement – part of True’s plan to raise THB65 billion ($2.03 billion) through an equity issue.

True has offered its existing shareholders the rest of this recapitalisation, valued at THB36.4 billion. The operator has has managed to reduce its debt to THB10 billion, with this latest deal enabling it to repay THB55 billion ($1.7 billion).

Recently, True’s priority has been to raise cash in order to reduce debt and deploy 4G services. It had considered founding an infrastructure fund via an IPO that would sell and lease towers, although it is unclear whether this plan will now be necessary.

CEO Suphachai Chearavanont noted that the group had lowered its net debt to earnings (before interest, taxes, depreciation and amortisation) to 1.5 times, down from 5.1 times. The new deal will see True adding an extra three members – representatives of China Mobile – to its board.

China Mobile stated that the agreement allowed the firms “not only serve [their] local market better, but also lays a good foundation for exploring prospective business opportunities and expansions in each other’s market”.


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