Thaksin plans iTV takeover

TELECOM tycoon Thaksin Shinawatra is pressing ahead with his plan to take over iTV Public Co Ltd, even though its two major shareholders, Crown Property Bureau and Siam Commercial Bank, prefer to keep ownership of the TV channel in the hands of the general public, said financial sources.

A source close to the Siam Commercial Bank confirmed rumours, which have been circulating over the past few days, that Thaksin, who also aspires to be Thailand's prime minister, wants to acquire a controlling stake in iTV.

"It's true that he is very interested in iTV, but the likelihood is that the Crown Property Bureau and Siam Commercial Bank will not sell it off to any particular party," she said.

She said the two shareholders would like to keep iTV as a truly independent television channel owned by the general public.

"What they want is for the company to do an initial public offering and distribute its stocks to the public as widely as possible so that iTV really belongs to the public," she added.

Thaksin, who amassed his wealth in the telecom industry, is running to become Thailand's next prime minister as the leader of the Thai Rak Thai Party. He is also integrating his telecom and Internet businesses and plans to list his flagship Shin Corp Plc on the US Nasdaq market.

His interest in iTV is not surprising given the trend towards convergence between the telecom business and the media and entertainment industry.

Financial sources say that iTV will need to raise capital by another Bt800 million because its cashflow is about Bt600 million short. But to raise new capital and to attract new investors, it will need to change its rigid articles of association, which bar any group or party from holding more than 10 per cent of the company.

The articles bring iTV, which has changed its legal status from a limited to a public company, into conflict with the public company act. Yesterday, the Cabinet approved iTV's proposal to amend its articles of association, paving the way for new investors to buy into the company.

The Cabinet had to vet iTV's proposal because iTV is the TV concessionaire of the government. The company also won approval from the Cabinet to delay, by a further 673 days, payment of its Bt300 million in concession fees to the government. The payment should have been made July 3, 1998, but a revenue shortfall and debt obligations prevented iTV from making the payment.

The Cabinet also decided yesterday to allow iTV to amend its concession contract with the government, particularly the fee structure which was based on pre-crisis forecasts of revenue potential.

Recently, Sarunthorn Chutima, managing director of iTV, said the company plans to raise its capital from Bt1 billion to Bt1.5-2 billion. The company has been in talks with potential partners from the US, Europe and Asia to participate in the capital increase, he said.

BY THANONG KHANTHONG and

SOMLUCK SRIMALEE