TRUE announces 4 billion of DIF selloff to stock up working capital

True Corporation PCL (TRUE) reported through the Stock Exchange of Thailand (SET) on Wednesday that it approved selling not more than 300 million investment units of the Digital Telecommunications Infrastructure Fund (DIF).

The transaction will account for 2.822 per cent of the total investment units of DIF and will be worth 4 billion baht of the transaction value. The offering price is determined by a book-building from interested investors.

The proportion of TRUE’s holdings in DIF will decrease from 26.18 per cent to 23.38 per cent.

According to the statement, the move is a strategic investment in order to preserve the fund for the working capital to its businesses. 

MayBank Kim Eng Securities said the transaction can generate 4-4.2 billion baht of proceeds and potential gains (pre-tax), ranging between 338-499 million baht depending on the final price.

TRUE’s net profit forecast in the 2020 fiscal year stood at 1.38 billion baht because the second-half is likely to be loss-making due to a high-cost base, MayBank Kim Eng said. 

Analysts at Kasikorn Securities also said that the DIF disposal at a price below the market price of 1.4-4.9 per cent had a negative impact on both DIF and TRUE while the fundamentals still remain.

However, another 3.28 per cent of disposal in 2020’s fourth quarter or the first quarter of 2021 may cause DIF to drop further, said Kasikorn. 

Shares of DIF decreased by 2.83 per cent to 13.80 baht at 11:33 a.m. on Wednesday. Meanwhile, TRUE shares rose by 0.65 per cent to 3.12 baht with a transaction value of 77.9 million baht. 

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