BTS plans fund for four new projects

BTS Group Holdings is setting up an infrastructure fund worth between Bt50 billion and Bt60 billion as it considers investing in four new mass-transit projects.

Future net fare revenue (after deduction of relevant operating costs and capital expenditure) of Bangkok Mass Transit System (BTSC), the operator of BTS Skytrain, will be sold to the fund, subject to approval of the Securities and Exchange Commission and shareholders, who will convene on December 18.

"The launch of the fund will offer an alternative investment instrument, which provides a stable cash flow from the existing core lines as well as growth potential from increased ridership after the expansion of the mass-transit network," said Keeree Kanjanapas, BTSG chairman and chief executive officer.

Under the mass-transit master plan, the government will invest in at least 10 additional rail routes, to extend total rail coverage to about 500 kilometres across Greater Bangkok by 2029. BTSG is interested in investing in the 12km Green Line extension from Mo Chit to Saphan Mai, the 13km Green Line extension from Bearing to Samut Prakan, the 36km Pink Line from Khae Rai to Min Buri, and the 18km Light Rail Transit Line from Bang Na to Suvarnabhumi Airport.

BTSC operates the existing Green Line under a concession due to end on December 4, 2029. As BTSG intends to subscribe to one-third of the fund, of which the value is expected to be at least Bt50 billion, BTSC will remain under the company's control.

Keeree said that if there are any leftover proceeds, BTSG might consider paying special dividends to shareholders. From July to September, its fare revenue totalled Bt1.2 billion, against Bt1.09 billion in the same period last year, thanks to quarterly ridership growth of 9.4 per cent. It reported ridership of 49.4 million passengers, a new record for the Skytrain system.

"We are in an advantageous position to partake in the network development as a result of our deep experience and capability in managing the elevated Skytrain system and by virtue of the connectivity of our system to some of the new lines," Keeree said.

"Should we be selected by the government for these potential projects, having financial strength will help us in the investment process, which could facilitate a more rapid development of these extensions and new lines under the current mass-transit master plan."

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Article source: http://www.thethailandlinks.com/2012/11/11/bts-plans-fund-for-four-new-projects/