SET-listed fund to raise BTS cash

Skytrain operator says it needs capital reserve

BTS Group Holdings Plc, the skytrain operator, will raise capital through an infrastructure fund worth 50-60 billion baht to be invested in future elevated train projects.

Chairman Keeree Kanjanapas said the company's board approved the increase through the infrastructure fund in order to have capital ready for its plan to bid for the operation of future mass transit lines.

The fund units are expected to be sold at the end of January or the beginning of February, depending on how soon the Securities and Exchange Commission (SEC) grants approval.

The company will submit a filing to the SEC on Monday.

The infrastructure fund is a recent allowance by the SEC in the regulator's bid to create further sources of funds for infrastructure projects, which require huge amounts of capital and a long time to break even.

The fund will guarantee returns to unitholders with fare revenue generated from existing transit lines during the 17-year remaining concession period.

"The company will hold one-third of the shares in the fund, while the rest will be sold to the public," said Mr Keeree, adding that the fund will be listed on the Stock Exchange of Thailand (SET).

BTS expects to reap a profit of 10 billion baht from listing the fund on the bourse, while unitholders will receive a 6-7% annual yield from investing in the fund, higher than bank interest rates.

Unitholders will also gain from dividends exempt from withholding tax for 10 years.

"Infrastructure development uses a lot of funds," said Mr Keeree.

"It's not that the government cannot handle it, but if the private sector gets involved, then it can push the process to go faster."

In the first half of this year, revenue from passenger fares grew by 14% and accumulated revenue by 10%.

Fare revenue is expected to grow by 12-15% this year.

After launching the fund, the company's revenue and net profit is expected to grow by 20-30% in the next fiscal year starting April 1.

In the second quarter of this fiscal year, BTS posted a 45% year-on-year drop in net profit to 732 million baht.

Total revenue was 2.77 billion baht, down by 11% year-on-year despite improved performance from the mass transit and media businesses.

Revenue from mass transit and media accounted for 62% and 30% of group revenue, respectively, with property generating 8% and the rest coming from services.

Total assets stood at 65.6 billion baht as of Sept 30.

Quarterly ridership grew by 9.4% year-on-year to a record 49.4 million, driven by passengers on the Sukhumvit Line extension that opened in August 2011.

Compared with the previous quarter, ridership rose by 6.4%, aided by seasonal effects from several public and school holidays in the March quarter.

Average weekday ridership rose by 19.1% year-on-year and 10.8% quarter-on-quarter to 644,584.

Mass transit revenue grew by 13.7% year-on-year to 1.5 billion, supported by a 9.4% increase in ridership and a 3.73% rise in the average fare to 25 baht per trip from 24.10 baht.

The figure was up by 8.2% quarter-on-quarter.

The media business enjoyed another strong quarter, its revenue rising by 38.5% year-on-year and 13.7% quarter-on-quarter to 725 million baht.

Shares of BTS closed yesterday on the SET at 6.55 baht, up 30 satang, in heavy trade worth 1.36 billion baht.

About the author

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Writer: Soonya Vanichkorn
Position: Reporter