True Corp – a holding company of TrueMove, one of the main telcos in Thailand – has announced an alliance with China Mobile (NYSE:CHL; HKG:0941) through a private placement of approximately 28,600 million baht (US$882 million). The amount is equivalent to China Mobile taking 18 percent of True’s total shares.
The news was first mentioned earlier today by Reuters as True Corp shares were suspended earlier on in the day pending the announcement. The news was confirmed by True moments ago.
In the official release, Li Yue, CEO of China Mobile said:
China Mobile has been expanding internationally and is seeking overseas strategic investment opportunities to further develop its international operations.
True Group is the ideal partner in Thailand as evidenced by its leadership in the broadband and cable TV industry as well as its leading position in the 3G and 4G mobile business amidst the fierce competition in the Thai telecommunications sector. China Mobile views True Group’s unique convergence business strategy and long-term vision as strong potential to bring about long-term growth profitability. Through the proposed strategic investment in True Corporation, China Mobile is expected to access to new customers, international business opportunities and new earnings growth drivers.
Supachai Chearavanont, president and CEO of True Corporation (SET:TRUE), said that during the past two years True Group has reached several milestones, including the nationwide expansion of its cable broadband business, the migration of its mobile business from 2G to 3G, and the rollout of Thailand’s first commercial 4G LTE mobile service.
True Corp will seek approval from its shareholders on July 25 for its recapitalization which amounts to approximately 65 billion baht (US$2 billion).Editing by J.T. Quigley and Steven Millward