Monday, August 27, 2007

Thailand's Samart may sell Cambodia air traffic stake

NUNTAWUN POLKUAMDEE

Samart Corp is considering divesting its 100% stake in Cambodia Air Traffic Service (Cats), according to unnamed sources.

Cats, which has 22 years remaining on its 30-year concession from the Cambodian government to offer air traffic control services, could fetch a hefty price from foreign buyers, considering the economic and tourist potential of the country.

One source said foreign buyers have suggested a pricetag as high as $1 billion to buy the company.

But advisers to the Vilailuck family, the major shareholders of Samart, are advising that a share sale should only be for a 20% to 25% in Cats.

"The value of the company rests with the concession and monopoly rights. The protection period has a significant amount of time remaining, and the potential value is very high," one source said. "There have been a number of offers so far. But no firm buyer has yet been selected."

Sources said Samart's investments in Cambodia offer significant upside potential as the Cambodian economy continues to grow and open up to foreign investment. Economic growth over the past three years has averaged 11.4% and is projected to reach 9% this year, compared to just 4% for Thailand.

Cambodia's favourable location in Indochina also offers benefits to Cats for air traffic moving to Thailand, Hong Kong and Vietnam.

Watchai Vilailuck, the Samart president, said no decision had been made on the company's policies toward its Cats subsidiary. Samart wanted to expand its I-Mobile brand into the region, given the significantly higher margins offered to the company from sales when compared with handset sales for international brands like Nokia or Motorola.

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