Listing of Thailand Future Fund faces next delay

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The Thai government once again postponed the initial public offering of its long-awaited Thailand Future Fund which was due to list in the second quarter this year after a series of earlier delays. It will now likely be listed in September this year.

The fund, created to raise 100 billion baht ($2.89 billion), was initially announced in 2015 as source of funds for infrastructure projects to lift economic growth. It would mainly be used for the construction of ring roads outside Bangkok and a motorway to the industrial zones southeast of the capital, and would have two revenue-generating existing expressways as underlying assets.

Plans were that the fund in the first phase would sell units worth 40 billion to 50 billion baht to Thai and foreign investors with a return likely at seven to eight per cent, according to earlier statements by Thai Finance Minister Apisak Tantivorawong who approached Chinese and Middle Eastern investors to promote the fund. Among them, the China Investment Corporation and a sovereign wealth fund from Oman showed interest.

However, there seems to be disagreement between ministries about the costs of launching the fund. While the finance ministry wants to go ahead with the pubic listing to avoid increasing public debt and use public funds rather for publicly beneficial projects, including hospitals, telecommunications and safety nets for retirees.

But the transport ministry is of the opinion that fund-raising costs of the Thailand Future Fund would exceed the cost of borrowing backed by the finance ministry in the current low interest rate environment.

Deputy Prime Minister Somkid Jatusripitak said he had asked the finance ministry to look into the problem. However, the finance ministry insists it is ready to launch the fund and is waiting for what the transport ministry will say.

Chanvit Nakburee, deputy director of the State Enterprise Policy Office, is now trying to find a solution for the issue. But he denied that the fund’s return would be up to eight per cent, saying the rate will depend on the outcome of the book-building process that tests investor demand.

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Reading Time: 2 minutes

The Thai government once again postponed the initial public offering of its long-awaited Thailand Future Fund which was due to list in the second quarter this year after a series of earlier delays. It will now likely be listed in September this year.

Reading Time: 2 minutes

The Thai government once again postponed the initial public offering of its long-awaited Thailand Future Fund which was due to list in the second quarter this year after a series of earlier delays. It will now likely be listed in September this year.

The fund, created to raise 100 billion baht ($2.89 billion), was initially announced in 2015 as source of funds for infrastructure projects to lift economic growth. It would mainly be used for the construction of ring roads outside Bangkok and a motorway to the industrial zones southeast of the capital, and would have two revenue-generating existing expressways as underlying assets.

Plans were that the fund in the first phase would sell units worth 40 billion to 50 billion baht to Thai and foreign investors with a return likely at seven to eight per cent, according to earlier statements by Thai Finance Minister Apisak Tantivorawong who approached Chinese and Middle Eastern investors to promote the fund. Among them, the China Investment Corporation and a sovereign wealth fund from Oman showed interest.

However, there seems to be disagreement between ministries about the costs of launching the fund. While the finance ministry wants to go ahead with the pubic listing to avoid increasing public debt and use public funds rather for publicly beneficial projects, including hospitals, telecommunications and safety nets for retirees.

But the transport ministry is of the opinion that fund-raising costs of the Thailand Future Fund would exceed the cost of borrowing backed by the finance ministry in the current low interest rate environment.

Deputy Prime Minister Somkid Jatusripitak said he had asked the finance ministry to look into the problem. However, the finance ministry insists it is ready to launch the fund and is waiting for what the transport ministry will say.

Chanvit Nakburee, deputy director of the State Enterprise Policy Office, is now trying to find a solution for the issue. But he denied that the fund’s return would be up to eight per cent, saying the rate will depend on the outcome of the book-building process that tests investor demand.

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