The Norwegian telecom operator Telenor said on Thursday that it had agreed to sell its stake in True Corporation of Thailand for a total of 39 billion Norwegian crowns (123 billion baht or $3.9 billion).
Telenor Group said it had signed the agreement with Arise Digital Technology Co, owned by Suphachai Chearavanont, the chairman of True Corp.
Arise Ventures Group said Mr Suphachai has stepped down from another position as chief executive of Charoen Pokphand Group, the parent of True, to focus on Arise and its strategic interests.
The agreement calls for Telenor to sell a 24.95% stake in True to Arise at 11.70 baht a share, the two companies said in a release.
In addition, Arise and Telenor have agreed on a mutual put/call option for the sale of the remaining 5.35% shareholding two years after the closing of the initial sale. The price will be the higher of 11.70 baht per share and the market price prior to the term of the option.
The news prompted a sell-off in True shares, which closed down 14.5% at 10.60 baht on Thursday on the Stock Exchange of Thailand, with heavy turnover of nearly 11.9 billion baht.
225% return for Telenor
Telenor will book an accounting gain of 14.7 billion Norwegian crowns at the current exchange rate at the closing of the initial stake sale. It said it would provide further information next month on the use of the proceeds.
The company said the value of the deal represented a 225% gain from the market value of its DTAC mobile business before merger talks with True began in 2021.
Telenor has been a major investor in Asian telecoms since the 1990s, building operations in Bangladesh, Thailand, Malaysia and Pakistan, but has recently said it is open to structural deals as the industry matures.
“With the completion of the sale of Telenor Pakistan in December, and the agreement to sell our shares in True we have taken big steps in delivering on that strategy,” Telenor CEO Benedicte Schilbred Fasmer said.
Focus closer to home
The divestment is expected to boost Telenor’s return on capital employed and also underpins the company’s goal of focusing more of its business in the Nordic region, she said.
Telenor first entered Thailand in 2000 and built the DTAC mobile business into a major player, ultimately deciding in 2021 to merge with True. The merger took until March 2023 to complete because of regulatory requirements.
CP Group and Telenor Group held equal stakes of approximately 30.3% each in the new company known as True Corporation.
Thai regulators required the merged entity to maintain both the True and DTAC brands for at least three years following finalisation of the deal, though back-office operations are being consolidated.
True Corp currently has about 49 million mobile customers under the True Move and DTAC brands, while Advanced Info Service has about 47 million.
“Before the 2021 merger talks, our shareholding in Thailand was valued at 12 billion crowns. Today the value of our shareholding stands at 39 billion crowns, based on the agreed sale price and the current exchange rate,” Ms Schilbred Fasmer said.
“Together with our partner True Corporation we have established market leadership in Thailand while also generating shareholder value.”
