BTS shareholders approves infrastructure fund transaction

The Extraordinary Shareholders’ Meeting of BTS Group Holdings PCL (BTS) today (18 December 2012) approved a fund raising through the establishment of BTS Rail Mass Transit Growth Infrastructure Fund (BTSGIF or the Fund) which will invest in the future net farebox revenue from the operation of the core green lines of 23.5 km (connecting Mo Chit-On Nut, and Taksin Bridge-National Stadium) operated by Bangkok Mass Transit System PLC (BTSC), a subsidiary of BTS. The Extraordinary Shareholders’ Meeting also approved the subscription of one-third of BTSGIF units to be issued through a potential initial public offering (currently BTSGIF is seeking approval to establish the fund with the SEC). The BTS Extraordinary Shareholders’ Meeting approved BTS to facilitate the establishment of the Fund that will invest in the future net farebox revenue from the operation of the core green lines until the end of the concession on 4 December 2029 at the estimated value of Baht 50,000 – 60,000 million, but not less than Baht 50,000 million, to the Fund. The net farebox revenue mainly comprises of the farebox revenue after deduction of relevant operating costs and capital expenditure. Other than organic growth of farebox revenue, BTSGIF can also enjoy opportunities to invest in mass transit projects in Bangkok and its vicinity developed by BTS or BTSC as well as any other assets allowed under regulations. The Fund is seeking approval to establish the Fund from the Office of the Securities and Exchange Commission (the “SEC”). After the fund establishment is approved by SEC and investment units are offered to the general public, the Fund will apply for listing in the Stock Exchange of Thailand. Mr. Keeree Kanjanapas, Chairman and Executive Chairman of BTS, said that “If the establishment of the fund is approved by the SEC within the expected time, BTSGIF should be the first infrastructure fund in Thailand to be offered to the public. The fund provides the public with an opportunity to benefit from the farebox revenue of BTS’ core green lines which enjoyed compounded annual growth rate in ridership of 10.9% for the past 13 years of operation. Therefore, BTSGIF is an alternative investment which offers exposure to growth from expansion of mass transit network in Bangkok and its vicinity. Other benefits for unitholders include 10-years’ personal income tax exemption on dividends from the fund establishment date.” BTS intends to use a portion of the expected net proceeds from the transaction to invest in new projects. With the government’s master plan to invest in 10 additional rail mass transit routes and extend total rail coverage to approximately 508 km across Bangkok and its vicinity by 2029, BTS is interested in investing in a number of potential lines, including the Green line extension from Mochit to Saphan Mai and from Bearing to Samut Prakan, the Pink line from Kae Rai to Minburi, and the Light Rail Transit line from Bangna to Suvarnabhumi Airport. BTS will prioritize lines that have direct connection to the core green lines, leading to a more completed route that will facilitate Thai citizens to commute conveniently, punctually and safely. BTSGIF has appointed BBL Asset Management Co., Ltd, as fund manager, Phatra Securities PCL. as local financial advisor, and Morgan Stanley & Co. International Plc and UBS AG, Hong Kong Branch and Phatra Securities PCL as joint international financial advisors, joint global-coordinators and joint bookrunners for the proposed offering. -KPA-

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