Thailand to Allow Companies to Raise Money for Overseas Projects

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30 July 2014 | Anuchit Nguyen | Bloomberg News


Thailand plans to allow companies to raise funds locally for infrastructure projects in neighboring countries such as Laos, Myanmar and Cambodia.

The regulator will approve rules as early as this quarter for so-called International Infrastructure Trusts to finance the construction of power plants, tollways and other public works, said Vorapol Socatiyanurak, secretary general of the Securities & Exchange Commission. Several Thai and foreign companies have expressed interest in offering infrastructure trusts, he said in an interview at his office in Bangkok today.

Thailand, Southeast Asia’s second-biggest economy, has been promoting itself to neighbors with less-developed capital markets as a place for raising funds. Army chief Prayuth Chan-Ocha, who seized power in military coup on May 22, has said he will boost investments in projects along the nation’s borders to increase trade. The three neighbors accounted for less than 4 percent of Thailand’s international trade in 2013.

“Laos, Myanmar and Cambodia will require a vast amount of funds for the development of their infrastructure,” Vorapol said. The trusts help serve those needs and will be an “attractive” investment option, he said.

Laos raised 1.5 billion baht ($47 million) by selling sovereign bonds to Thai investors for the first time in May 2013. Companies such as Banpu Pcl (BANPU), Thailand’s biggest coal miner, CK Power Pcl (CKP) and Ratchaburi Electricity Generating Holding Pcl (RATCH) are building power plants in Laos that will supply electricity to Thailand. Gunkul Engineering Pcl (GUNKUL) has power plant projects in Myanmar.

The new trusts will be backed by revenue from the infrastructure projects in those neighboring countries. At least 70 percent of the total construction must have been completed for companies to get financing, said Vorapol.

Vorapol said he expects state-controlled companies such as Airports of Thailand Pcl, Electricity Generating Authority of Thailand and Expressway Authority of Thailand to launch initial public offerings for infrastructure funds. He declined to provide a timeframe.