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Logo of Phnom Penh Post newspaper Phnom Penh Post - Thaicom to sell Mfone for $100

Thaicom to sell Mfone for $100

Troubled Cambodian telecoms operator Mfone will be disposed of by its parent company, Thaicom, in the coming weeks for $100 to INT Management Service Company Limited (INT), according to a filing with the Stock Exchange of Thailand (SET).

Shenington Investment, a subsidiary of Thaicom and the holder of 100 per cent of Mfone’s shares, received approval from Thaicom to divest its 24 million shares in a board meeting on November 12.

Atip Rittaporn, the managing director of Shenington Investment and Mfone’s acting CEO, said he was unable to provide further details of the transaction because details had not been finalised.

He also told the Post he was surprised to learn that the company might be handed over for just $100.

Rittaporn anticipates the sale will be finalised in the coming weeks. Thaicom’s filing with the SET states the transaction will be effective no later than January, 2013.

Ken Streutker, assistant vice-president of investor relations at Thaicom, declined to provide details other than those mentioned in the filing made to the SET.

Attempts to contact INT have been unsuccessful.

The filing says the reason for the sale is that Mfone has generated losses in the past three years, blaming the intense competition in Cambodia’s mobile market.

An analyst report from DBS Vickers Security in Singapore on the performance of Thaicom stocks anticipated that INT would pay very little to acquire the 100 per cent stake in Mfone.

“According to the official announcement, this transaction is priced at $98.4 million, which is the estimated enterprise value (EV) of Mfone,” the report says.

“The acquirer will assume the debt, and we believe most of the estimated EV is debt.

“This means INT may be paying Shenington very little for its stake.”

Thaicom’s filing to the SET states that Mfone has negative equity of $38.15 million.

The DBS report concludes that the divestment of Mfone should improve Thaicom’s bottom line by 500 million baht ($16.2 million) a year.

To contact the reporter on this story: Erika Mudie at erika.mudie@phnompenhpost.com

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