Thai billionaire Charoen Sirivadhanabhakdi is looking to raise as much as Bt42 billion ($1.36 billion) through an initial public offering of its hospitality and retail business amid signs of improved political stability following Thailand's long-delayed general election in March.
The IPO of Asset World Corporation, which started accepting institutional orders on Thursday, could fetch as much as $1.56 billion if a 15% over-allotment option is fully exercised. That would put it third by size on Thailand’s all-time IPO list, behind BTS Mass Transit Growth Infrastructure Fund's $2.1 billion IPO in 2013 and Digital Telecommunications Infrastructure Fund’s $1.8 billion deal in the same year.
Sirivadhanabhakdi and his flagship TCC Group plan to sell a 22.5% stake (25% post-greenshoe) in Asset World now that Thailand has successfully completed a general election repeatedly delayed since 2014, when an elected prime minister was overthrown in a military coup.
By establishing a new government in July, Thailand has theoretically completed the transition from a junta government to a civilian government. This is despite the fact that the junta leader, Prayuth Chan-ocha, was elected as the new prime minister and remains in power.
Thailand’s stock market has reacted positively so far to the political transition, with the benchmark SET index reaching its highest level at 1,740 points in July shortly after the new government took office. That was 11% higher than the beginning of the year, and about 6% higher than March when the elections took place. It has retreated about 4% since then.
Asset World’s IPO, if successful, could reignite Thailand’s dormant equity capital markets and kickstart a series of big corporate listings after a fairly subdued 2018.
The most anticipated of these potential listings is PTT Oil and Retail, the retail oil business of state-owned oil and gas giant PTT. The deal, tipped to raise at least $2 billion, could end up being the country’s largest listing ever.
Central Group, one of Thailand’s biggest conglomerates, is also planning to list its retail arm in a deal that could raise $2 billion. Another candidate is Kerry Logistics Thailand, the express delivery arm of Hong Kong-based Kerry Logistics Network, which is preparing for a $300 million floatation.
Last year, Thailand saw one major deal – a $460 million IPO for energy drink maker Osotspa. There was one larger IPO in the shape of Thailand Future Fund, which raised $1.4 billion, but that was largely government-driven and targeted only domestic investors.
Asset World operates shopping centres such as Gateway Ekamai and Centerpoint of Siam Square in Bangkok and several hotels including Hilton Sukhumvit Bangkok, Banyan Tree Samui, Le Meridien Chiang Mai and Marriott resort in Hua Hin, as well as rent out office space.
The company plans to sell 6.96 billion shares at a fixed price of Bt6 per share, according to the terms released Thursday. About 54% of the shares will be allotted to international investors and 46% to domestic investors.
About half of the deal has already been subscribed by a 13-strong list of cornerstone investors. This includes GIC Private, Singapore’s state investment fund, which has agreed to buy $300 million worth of shares.
Asset World will close both institutional and retail subscriptions on September 27. The shares are expected to list on October 10.
Bank of America Merrill Lynch, Morgan Stanley and UBS are joint international bookrunners of the IPO. Phatra Securities, Bualuang Securities, Kasikom Securities and SCB Securities are joint domestic bookrunners.