The Thai Securities and Exchange Commission ("SEC") is set to launch a new investment vehicle to investors in Thailand. It has approved in principle the establishment of the Thai Infrastructure Funds ("TIF"), a mutual fund which will invest in assets of infrastructure projects in Thailand owned by state's enterprises. The Thai SEC expects the Notification be issued in the latter half of 2010.
Deliberations which started in 2008 and two hearings after, the Thai SEC recently approved in principle the establishment of TIF. This closed-end mutual funds will invest in assets of infrastructure projects in Thailand, such as electricity, waterworks, transportation projects and expressways. TIF aims to raise funds from the private sector to support state enterprises in developing infrastructure in Thailand. Under the TIF, the ownership of the infrastructure projects shall remain with the state enterprises.
The initial projects will focus on infrastructures of the Electricity Generating Authority of Thailand, the Metropolitan Electricity Authority, the Metropolitan Waterworks Authority and the Expressway Authority of Thailand.
The following are the significant details of the TFI:
|Size||Not less than THB5 Billion|
|Investment Units||Multi-tranche investment units, classified by the right to dividends, return ratio, conditions for the return of funds, liquidation rights, fees or any other basis to be approved by the SEC|
|Offering and Allotment||
The investment units must be allotted to Thai retail investors by way of "Small Lots First"
Not more than 1/3 of the total investment units sold can be allotted to one person
|Number of Investment unit holders||
Not less than 1,000 unit holders and a free float ratio of not less than 20 percent of the total value of the investment units sold at the time of establishment
Not less than 150 unit holders and free float ratio of not less than 15 percent of the total value of the investment units sold at the time of listing
|Investment Limit||Not less than 75 percent of the total assets of the fund within six months after listing|
|Borrowing Limit||No limit on borrowing money, provided that it is for investing, refinancing or maintaining assets of the infrastructure project|
|Dividend Payment Rate||Not less than 90 percent of the adjusted profits (i.e. profits after the deduction of unrealised gain, reserved maintenance fund and reserved loan repayment)|
|Foreign Limit||Same as the foreign limit provided in the laws governing and regulating the infrastructure projects|
For inquiries related to this Client Alert, please contact:
Nipaporn Weskosith ( )
Sathaporn Jumsuk ( )
Patruetai Siriakraseth ( )
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