The International Finance Corporation (IFC), the private sector arm of the World Bank Group, has signed and disbursed a Bt1.4bn (US$33mn) debt financing package to TA Orange, the mobile subsidiary of True Corporation of Thailand, an existing IFC client.
TA Orange is the third largest mobile telecommunication operator in Thailand. True Corporation is a leading provider of telecommunications services in Thailand offering fixed line telephone, cable TV, internet and other multimedia services.
“This project provides IFC with the opportunity to support a domestic company that needs financing in Thai baht,” says IFC Thailand country manager Michael Higgins. “IFC wants to encourage strong market players like TA Orange that increase competition and expand infrastructure, especially in rural areas. IFC’s role is important because it promotes environmentally and socially sound project implementation.”
Offering local currency loan options is part of IFC’s strategy to offer sustainable financing solutions to clients. The structure of this IFC financing reduces foreign exchange risk for TA Orange.
“Through this project, IFC is supporting an existing client, True Corporation, to consolidate its market position through a critical strategic extension of its existing fixed line business into the fast growing mobile sector,” adds IFC director of global information and communication technologies, Mohsen Khalil. “By enabling TA Orange to restructure and accelerate its network expansion, the project will contribute to the competitiveness of the market, which in turn should broaden access and bring tariffs to affordable levels for consumers.”
IFC is also supporting a broader financing effort by True to acquire its mobile subsidiary and by TA Orange to fund its long-term network expansion and strengthen its capital structure. Globally, an US$850mn financing is being provided, consisting of US$650mn equivalent provided by local banks lead by Kasikorn Bank, Siam Commercial Bank, Krung Thai Bank and Bangkok Bank, and US$200mn equivalent provided by international lenders lead by IFC and KFW.