The acquisition boosted the value of deals in Southeast Asia over the past 12 months to US$50.6 billion (Bt1.78 trillion).

Big C stock closed 9.69 per cent higher at Bt249 in trading yesterday.

Agreeing to pay 3.1 billion euros (Bt123 billion) to France’s Casino Group for a 59-per-cent stake and probably Bt80 billion for a tender offer of all remaining shares, Charoen – through his family-owned business TCC Group – will claim ownership of all of Big C’s 700 stores in Thailand.

Speculation is rife that Big C Thailand could be used as a vehicle to take over Big C Vietnam from Casino Group, just as Charoen is expanding his pool of assets in Asean and bridging the upstream (beverage and consumer goods manufacturing) and downstream (distribution) activities in his empire.

“He has dreamt of owning a retail business for a long time to support his manufacturing business,” a source in the Thai retail industry said yesterday.

In the upstream business, Charoen has spent years developing logistics networks, not only in Thailand, but also in many strategic Asean markets including Vietnam and Malaysia. With Big C, he has plenty of shelves for his products.

The source noted that an acquisition was an easy way to enter the Thai retail market, given fierce competition. With a brand, Charoen can also put his vast landholdings across the country to good use.

That explains why he bid for Carrefour in 2011. The deal fell through, with Big C winning the race. He kept looking while expanding the upstream market.

In 2011, Thai Beverage, the flagship company of his empire, took over Sermsuk – a bottler that boasts the most extensive logistics network in Thailand. Another deal was clinched in 2013. At a price of $11.2 billion, he took control over the soft-drink, dairy and publishing businesses of Singapore-based Fraser & Neave.

But squeezed margins on the home turf convinced local market players that Charoen would not stop here.

A veteran retailer sees Charoen aiming big in Vietnam, where demand should be sufficient for all types of store formats – from hypermarkets to supermarkets and convenience stores – that Big C has operated successfully in Thailand.

This would complement Metro, a cash-and-carry chain in Vietnam that was just scooped up in January for $711 million, the retailer said.

An analyst at Asia Plus Securities is convinced that Charoen’s next move is to bid for Big C Vietnam.

The country could be a major market for the group given its rapid economic growth and relatively lower competition in the modern trade business. Big C Vietnam, estimated at Bt30 billion, now operates 32 outlets.

Banks upbeat

With slack loan demand on the domestic front, the deal gave a psychological boost to banks.

Patchara Samalapa, executive vice president of Kasikornbank, said the bank was ready to provide assistance with any kind of financing model proposed by TCC.

Pimolpa Suntichok, first executive vice president of Siam Commercial Bank, said a bridge loan should be the first step for TCC in paying the huge cash price to the seller. After that banks will offer financial restructuring to TCC to help ease its financial burden.

“We have room to finance TCC because we don’t have problems with a single lending limit to TCC Group,” she said.

TCC is expected to finance the deal with its own cash and loans.

In 2013, three Thai banks – Bangkok Bank, Krungthai Bank and SCB – joined four foreign banks in extending a Bt180-billion bridge loan to CP All for the acquisition of Siam Makro. The loan maturity was 18 months.

Most bankers expected TCC to require a similar facility.

 

Sombat Leelapata, acting deputy secretary-general of the National Broadcasting and Telecommunications Commission, said all five members of the committee agreed to send Thai TV a written notice on the revocation of the licences, which had been suspended for 90 days pending payment.

However, Thai TV refused to hand over the Bt288-million second instalment of its upfront licence fee as well as the annual fee.

Led by media veteran Pantipa “Sister Tim” Sakulchai, Thai TV decided last year to relinquish its licences to run news channel Thai TV and another channel for children and family called Loca, which was later renamed MVTV Family.

The company also failed to pay its annual licence fee, which is about 2 per cent of revenue.

Thai TV is expected to receive this notice from the NBTC within two days. The broadcaster still owes the remaining five instalments of the upfront licence fees worth Bt1.63 billion plus value added tax, which are due within 30 days.

It will also have to shoulder the unpaid annual licence fees and a daily fine of Bt60,000.

This also means that Thai TV is blacklisted from any broadcasting activities. Another notice will be sent to Thai Public Broadcasting Service, which leases its network to the financially ailing broadcaster. The NBTC will also seek Bt1.63 billion compensation from Bangkok Bank under the bank’s guarantee.

“If Thai TV also fails to pay such costs, the bank guarantor should assume this responsibility on behalf of its customer,” he said.

Suchat Chomkul, legal adviser for Thai TV, said his client would send a protest letter to NBTC against its decision yesterday and petition the Central Administrative Court to void the NBTC’s order and call for a temporary injunction because the company will not allow the NBTC to claim the bank guarantee.

Hon Hai apparently aims to launch its own original-brand products by absorbing Sharp’s technology, even if it has to invest a vast sum of money. Sharp also has high hopes for turning around its performance.

However, Sharp – which has faced financial crises twice since 2012 – failed to reconstruct its management even after receiving a large amount of financial support. It is unclear whether Sharp will be revived with a Japan-Taiwan alliance.

“Unless we have confidence, we cannot invest such a vast sum of money,” said Hon Hai chairman Terry Gou, smiling as he spoke to reporters in front of Sharp’s head office in Osaka during a visit to Japan.

Through its high-value capital investment, Hon Hai intends to expand its businesses further by obtaining technology from Sharp, a world leader in liquid crystal panels, observers said.

In the field of home electronic appliances, Hon Hai expects to use Sharp’s planning and developing abilities to produce unique products. Gou stressed the merits of acquiring Sharp, saying, “If products are developed to be ‘smart’ [devices], we will be able to expand [our market] share.”

Hon Hai’s scenario for reviving Sharp is to restore investment for growth, which has virtually suspended due to financial difficulties. By utilizing its ample funds and substantial worldwide customer base, Hon Hai aims to boost Sharp.

Hon Hai has achieved rapid growth by manufacturing products for firms around the world, including Apple Inc of the United States. However, there are some signs of decline in its business. It is believed that it has been Gou’s long-cherished wish to produce products labelled with its own original brand. Obtaining the Sharp brand will be a big advantage for Hon Hai.

Meanwhile, Hon Hai is also appealing for Sharp. Not only is Hon Hai’s investment large, but the Taiwan firm’s proposal does not involve dividing Sharp’s businesses. By utilising Hon Hai’s customer base, Sharp can expect expanding sales of liquid crystal panels and other products.

However, some observers think it will not be easy to rebuild Sharp.

“Cash and letter of bank |guarantee (L/G) are ready, waiting for a signal from the boss to submit them to [the National Broadcasting and Telecom-munications Commission] NTBC,” True chief financial officer Noppadol Dej-udom said.

True sent a letter last Friday to ask the NBTC to clarify what the regulator would do to prevent possible damage to True in the event that True fulfils its initial payment and bank guarantee but the other licence winner, Jasmine International, fails to do so by the deadline of March 21.

The NBTC replied to True last Friday that the 900MHz licences will be put up for re-auction three months after March 21 if True or JAS fails to pay the first instalment of the licence fee and provide a bank guarantee by that date. The licences will be re-auctioned at the final prices offered by the winners.

If only one winner of the December auction fails to meet the deadline, the other one that honours the agreement will be able to take part in the re-auction. If no one takes part in the re-auction, the bid will be postponed for one year.

The NBTC will also consider claiming damage from a winner that fails to pay the first instalment.

The NBTC telecom committee resolved all these measures last week in response to market speculation that JAS will fail to pay the first instalment by the deadline.

True Move H Universal Communication, a subsidiary of True, and Jasmine Mobile Broadband, subsidiary of JAS, won telecom licences on the 900-megahertz spectrum at an auction in December by quoting Bt76.298 billion and Bt75.654 billion respectively. Each will get a licence once it pays the first instalment and places a bank guarantee.

A source from True said that True is ready to install 900MHz cellular network equipment at 300 sites per day once the company obtains the licence.

“It will install the equipment on its existing 850MHz telecom towers. Of the total of 10MHz of 900MHz towers, half will be for providing 2G service and the other half for 4G service,” the source added.

Earlier True announced to launch the 900MHz service next month and the service will be nationwide in May.

There are more than 200 public companies established under the Myanmar Companies Act, but only six of them are short-listed for the listing, said Htay Chun, a member of the Securities and Exchange Commission of Myanmar (SECM). He noted that these six are being examined whether they meet the listing criteria.

He added that public companies stand a high chance to win new investment through YSX, but that requires an improvement in their corporate governance practices. To him, public companies must have efficient, transparent and auditable management that creates trust and confidence among its shareholders, investors, other stakeholders and all relevant parties. And they also need to prevent systemic risks and crisis, reduce investment risks, and ensure good returns for sustainable growth.

“Improving corporate governance policies and supporting good corporate practice will contribute not only to the development of the companies but also economic efficiency, sustainable growth and financial stability. Companies without good practices will face difficulties for sustainability,” he said at the conference titled “Strengthening Myanmar’s Private Sector Through Good Corporate Governance” last week.

YSX was opened in December but trading is slated to start in March. There are doubts whether the trading could start then. Only temporary securities licences were issued to four securities companies, while there is concern on the quality of listed companies and level of understanding among local investors.

At the event, Serge Pun, chairman of First Myanmar Investment Co and Yoma Bank, said that Myanmar received overwhelming interest from international businesses with a huge pool of working-age population but lost many opportunities due to too little institutional capacity to handle high volume of inflows. He said that Myanmar enters a new era after the election and the political climate is improving, boosting the economy. High growth can be expected and companies with good practices would gain the most over the next five years.

Pun said that a company’s reputation will lead to investor trust and trusted firms will have the ability to do business successfully and profitably. Good reputation would also draw skilled labour, just as how his group appeals to Myanmar natives who grew up overseas and return to their home country.

“Once trust is integrated, then benefits will flow,” he said, adding that FMI would be one of the first firms to list on YSX.

“Opening of YSX marks the modernisation of Myanmar’s economy. We should bring our economy to the global stage as Myanmar might never have such a good opportunity again,” he said.

Bandid Nijathaworn, president and CEO of Thai Institute of Directors Association, said that companies should promote trust from investors to bring in more capital. He said companies needed to promote stakeholders’ clear understanding of its activities and must truly commit to transparency. To him, a firm’s business plan must focus on risk management, attracting skilled staff and training.

“Many successful listed companies in Thailand are family businesses which have been able to adopt good corporate governance practices. I hope Myanmar can do the same thing in the future… It should start with top companies first, and then expand to other companies,” he said.

Chris Razook, International Finance Corporation’s (IFC) corporate governance lead for East Asia Pacific, stressed the need to change people’s mindset. He also backed eliminating bribery, which has been deeply rooted in Myanmar for the past two decades. He said local companies should focus on social and other issues, reduce unnecessary risks, and introduce best practices.

ACCORDING TO KAN, the innovations and productivity steering committee is focusing on promoting start-ups, while the legal-issues committee will push for a “regulatory guillotine”, a sweeping method of reviewing laws that was applied successfully by South Korea in the aftermath of the Asian financial crisis in 1997.

“We spend much of our time discussing start-ups,” he said, adding that the ones the committee would focus included not only technology enterprises, but also entrepreneurial ventures in other areas such as the service industries.

He said Somkid Jatusripitak, deputy prime minister in charge of economic affairs, had give much importance to start-ups, and the government might unveil a promotional scheme called “Start-ups Thailand” late next month.

Nevertheless, to achieve the government’s target to boost Thailand’s research and development spending to 1 per cent of gross domestic product by next year, or about Bt130 billion, up from 0.44 per cent in 2014, the committee will also have to focus on encouraging big companies to increase their R&D budgets. About 70 per cent of the total R&D spending targets are expected to come from the private sector.

“We have to hinge [rely] on large companies. As they increase their R&D investments, there will be more jobs and career paths created for researchers,” he said.

Multinational companies are also being persuaded to make more R&D investments in Thailand, especially in the special economic zones, where they can engage educational institutes or invest on their own, and earn extra tax and non-tax privileges.

On top of these privileges, the committee is considering giving MNCs’ lead researchers a reduced personal-income-tax rate, perhaps as low as 10 per cent, compared with the current 35-per-cent maximum rate.

A separate plan for strengthening innovative capacity of small and medium-sized enterprises is being drafted by the Industry and Science and Technology ministries, he said.

Kan said he thought the government’s incentives were already sufficient to attract investments in R&D and innovation-related projects, as it has recently approved an increase in the tax-deduction allowance for R&D projects to 300 per cent of their actual expenses, up from 200 per cent previously.

Another key issue is unleashing the potential of researchers working in the public sector through amending their key performance indicators to provide incentives for them to commercialise their research work or to allocate their time for working for the private sector. This is because Thailand currently has only around 9,940 science and technology researchers, and only 730 of them are working for the private sector (more than 100 at SCG).

Other issues being discussed by the innovations committee include additional tax-incentive packages for venture capitalists, establishment of a “fund of funds” to provide financial support to venture capitalists and innovative projects, and setting up an agency to take direct responsibility for providing knowledge to and grooming start-ups.

For the committee on laws and government mechanisms, which Kan co-chairs with Deputy Prime Minister Wissanu Krea-ngam, the most important job will be the introduction of the so-called regulatory-guillotine process to review and update laws and regulations that impose huge administrative, legal and political costs, estimated to cost Thailand about 5-15 per cent of GDP.

Former Bank of Thailand governor Prasarn Trairatvorakul, who also sits on the innovation committee, has agreed to chair a working committee to study and push for the implementation of the “regulatory guillotine.”

Kan said South Korea had successfully used this process to review tens of thousands of business regulations and eliminate half of them in less than a year, as part of its economic restructuring programme launched in the aftermath of the 1997 Asian financial crisis.

In addition, the law committee will focus on amending laws and regulations in five key areas: im-migration procedures, customs procedures, Food and Drug Administration procedures, town and city planning codes, and environmental impact assessment (EIA) processes.

The amended customs laws are under the consideration of the Council of State.

To comply with the expected remaining tenure of the current military-imposed regime, the tentative timeframe of these 12 public-private steering committees is about 18 months. Each of these committees works with all relevant ministries to achieve its agenda.

“In 2016, NMG will be investing in content for news channel Nation TV and variety channel NOW26 after seeing a rising in the number of viewers and advertising income,” Duangkamol Chotana, NMG’s chief executive officer, said yesterday.

Although the digital television industry is facing difficulties, things are slowly getting better. She said NOW26 has become the No 1 documentary channel.

Nation TV is also still a popular news channel, offering credible news content 24 hours a day. This year, the channel has been preparing to expand its viewer base by adding a greater variety of news programmes.

“This year, Nation TV will gradually launch new programmes starting this quarter,” Duangkamol said.

NOW26 was rated as having the fastest-growing viewership in the past six months, according to the latest survey by AC Nielsen, while advertising income has surged.

“NMG has prepared an investment budget of around Bt200 million to develop news content and quality programmes for both channels,” Duangkamol said.

The group plans to make its own documentaries via NOW Studio and also support other productions.

“NOW Studio plans to produce at least three films and documentary programmes this year,” she said.

The group has set aside Bt60 million to support documentary producers in the country. NOW26 would take a step forward by providing quality content spanning documentary news, outstanding lifestyles, heritage and culture as well as entertainment, she added.

“This year is good for public-relations business, given the big fillip provided by the AEC,” said Hasan Basar, managing director of Bangkok Public Relations – one of the country’s foremost PR consultancies.

“In recent years, Thai companies have been taking away PR talent for their in-house teams because of the change in visionary leadership at those companies. The CEOs or even PR teams have to see that in-house and PR consultancy offer slightly different experiences. More importantly, two is always better than one,” he explained.

Over the last three to five years, Thai firms have either been branching out to neighbouring countries or building a business empire at home that is attractive for overseas customers, in order to capitalise on the integration of the 10 Asean markets, he said.

This is in line with the global trend, in which international firms are shifting more focus to building and strengthening their own in-house marketing communication and public-relations arm as a complement to PR experts outside the company.

Basar added that this development also could be seen in legal consultancy. Despite having a strong in-house legal team, global companies still need to work with outside legal consultancy to make sure that the outcome is the most satisfactory for the organisation.

“This has provided a considerably good opportunity for my company to work with talented clients,” he said, citing his client Siam Piwat as an example.

The Kingdom’s major luxury retail operator and real-estate developer has its own strong in-house PR team with visionary leaders, he said.

“Working with them can help my team gain more insights about their business direction. So, we are able to get on the right track in suggesting to them the best, compelling communication strategy aimed at the right target, impact-fully,” the PR expert said.

Another important issue to be addressed in terms of the PR trend is that, in the current hyper-communication age, a company needs to have a key ambassador or spokesperson, like a well-reputed CEO, to create and amplify the impact of its message, he explained.

Despite the economic slowdown, Bangkok Public Relations believes that PR activities remain important both for local and international brands, he stressed.