Samart Keen to Take Over Shin Satellite

By Srisamorn Phoosuphanusorn, Bangkok Post, Thailand

Mar. 1–Samart Corporation yesterday declared a strong intention to take over Shin Satellite from Temasek Holdings in order to diversify into satellite operations.

The communication-equipment company has set up a team of lawyers and investment bankers to study the feasibility of the takeover, said president Watchai Vilailuck.

He said the price for the takeover target would be between six and seven baht per share, compared with the book value of 11 baht.

Shares of Shin Satellite (SATTEL) closed on the Stock Exchange of Thailand at seven baht yesterday, down 20 satang, in trade worth 54.87 million baht.

But the chief executive officer of Telekom Malaysia International, Samart’s largest shareholder with 19.23 percent, yesterday showed no interest in investing in Shin Satellite, saying it was not a core business of the group.

Also, the Malaysian telecommunications giant does not want to risk being charged with using nominees, according to Yusof Annuar Yaacob, CEO of TM International.

Mr Watchai, however, said the company’s feasibility study team was now in the early stage of analysing technical issues, as well as business and financial viability.

Earlier, Information and Communications Technology Minister Sitthichai Pookaiyaudom said three more Thai telecommunications companies had indicated interest in investing in Shin Satellite.

“We need to carefully study all viable aspects — the ability to manage and market the satellites, as well as unknown risk factors including a possible revocation of the concessions in the future, business security and uncertainties on the contract conditions,” Mr Watchai said.

“Additionally, we need to look at an appropriate time in terms of political and social issues.”

Mr Watchai said Samart had extensive experience in the satellite field in areas of ground stations, receiving terminals and data communications via satellites. But the takeover of Shin Satellite, if materialises, would be the company’s biggest-ever investment, and would have to be extensively reviewed.

Although Samart has the financial capability to invest in Shin Satellite, Mr Watchai acknowledged that the company would need foreign partners to help support the takeover deal.

“Money is not the sole element in operating satellites. Business strategies, management and marketing skills are all key factors,” he added.

Mr Watchai said the study would be completed within six months, and if it proved viable, Samart would start to talk directly with Shin Satellite’s representatives.

Samart Corp yesterday reported a net profit of 1.99 billion baht in 2006, up 200 percent from the year before, on revenue of 31 billion baht, up 64 percent.

Samart I-Mobile Plc, its mobile-handset subsidiary, posted revenue of 24.6 billion baht, up 89.5 percent last year. Net profit rose 29.7 percent to 488 million baht.

Samart Telcoms Plc reported net profit of 331 million baht, up 33.4 percent. Revenue rose 34.7 percent to 2.88 billion baht.

Mr Watchai attributed the group’s record-high performance to a sharp increase in the sales of its own i-Mobile handset brand to 2.5 million units, and high growth in overseas business through subsidiary SIM International Co.

He said Samart projected another year of strong growth in 2007, with consolidated revenue of 35 billion baht this year.

According to latest register book closing on April 4 last year, Shin Corp is the largest shareholder of Shin Satellite, at 41.34 percent, followed by retail shareholders (2.43 percent).

Temasek bought a 49 percent stake in Shin Corp in early 2006. It now holds 96 percent of Shin through a coalition of partners.

Shares of Samart (SAMART) closed at 8.85 baht yesterday, down five satang.

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SHSTY,