CP to gradually reduce its shareholding in airport railway project to raise further funds

By THE NATION

 

 

Suphachai Chearavanont, chairman of Charoen Pokphand’s executive board expressed his pleasure at being part of the high-speed railway project linking three international airports following the contract signing ceremony between the CP consortium and the State Railway of Thailand (SRT) on Thursday (October 24),

 

“CP Group is proud to be a part of this public-private joint investment that will connect Don Mueang Airport in Bangkok, Suvarnabhumi in Samut Prakan and U-tapao in Rayong,” he said. “CP will follow the contract details to the letter and work closely with our partners including China Railway Construction Corp, Bangkok Expressway and Metro Pcl (BEM), Italian-Thai Development Plc and Ch Karnchang Plc.

 

Suphachai (front row right) at the contract signing ceremony on Thursday (Oct. 24)

 

Suphachai further explained that construction would begin with 12 months of the area survey and contractor negotiation processes and is expected to be completed within 5 years as planned. “The most challenging areas are the Phayathai - Don Mueang section, which requires the demolition of existing infrastructure, and the Suvarnabhumi - U-Tapao section, which has the longest route,” he said.

 

“Currently CP holds 70 per cent share in the consortium, but we are planning to reduce our shareholding to 51 per cent during the construction period to attract more funding while maintaining our decision-making power,” said Suphachai. “After the construction is complete, CP will further lower its shareholding to 40 per cent to invite additional investment funds through various methods, including entering the stock exchange.”

 

Over the next six years, CP expects to raise Bt220 billion to cover the construction and development costs, he added.

 

The 220 km high-speed railway linking three international airports is scheduled to open in 2023, after which CP will be responsible for the Transit-Oriented Development (TOD) of areas around the train stations to expand the businesses and distribute income to surrounding communities. This project has an estimated economic return of Bt650 billion and is expected to create 16,000 jobs during the construction and 100,000 more jobs in related businesses over the next five years.

 

Related Story: CP group seals deal on high-speed airport rail

 

Source: https://www.nationthailand.com/news/30377732

 

 

-- © Copyright Thai Visa News 2019-10-25

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Looking to bail out already!

The real opportunity for them:

 

"Transit-Oriented Development (TOD) of areas around the train stations to expand the businesses"

 

Train stations surrounded by CP oriented biz, profit higher than transport and not to be shared with partners building the rail

Having used the name and brand recognition to get the contract CP are going to get their dividend early and start to pass the joys of the construction phase to someone who might know something about railways.

I wonder what the other joint venture partners think of this?

37 minutes ago, webfact said:

Currently CP holds 70 per cent share in the consortium, but we are planning to reduce our shareholding to 51 per cent during the construction period to attract more funding while maintaining our decision-making power,”

Suphachai doesn't seem to understand. The CP Group will be the subservient ones, it will be the SRT which will be making the decisions. If he doesn't know that now he will find out soon enough as their incompetence emerges.

He needs to make vitally sure SRT don't screw the CP Group over like they did with Hopewell.

and in the back row with the chest puffed out is !

So how many 330 baht tickets do they have to sell to make their money back?....

invite additional investment funds through various methods, including entering the stock exchange.”

 

 

 

Cant wait till I can buy some stock, the CP group is very kind to give the little people a chance get in on some of the action...

Edited October 25, 20196 yr by fforest1

1 hour ago, vincent13 said:

Looking to bail out already!

Is this why the former SRT board removed itself from these proceedings?

Or is it to make room for a Chinese "takeaway"?

 

Edited October 25, 20196 yr by hansnl

2 hours ago, fforest1 said:

So how many 330 baht tickets do they have to sell to make their money back?....

The railway itself is unlikely to be profitable. They will profit from developing land around stations. 

They're going to sub contract out the work....quite normal usually, but in Thailand, expect the worse.

I doubt there'll be much due diligence done by the stakeholders...mainly due to them not knowing much, and the convincing by CP that all will be good.

CP are a whole lot smarter than the SRT people.

Edited October 25, 20196 yr by ChrisY1

And the games begin. 

Will be interesting to see who decides this is worthwhile enough to buy some of the shares from CP.

4 hours ago, webfact said:

“Currently CP holds 70 per cent share in the consortium, but we are planning to reduce our shareholding to 51 per cent during the construction period to attract more funding while maintaining our decision-making power,” said Suphachai. “After the construction is complete, CP will further lower its shareholding to 40 per cent to invite additional investment funds through various methods, including entering the stock exchange.”

Shareholding going from 70% to 51% down to 40% CP getting it's money back as the railway will never make a profit !

 

5 hours ago, webfact said:

but we are planning to reduce our shareholding to 51 per cent during the construction period to attract more funding

Looks like the baht will have to stay high. Don't worry about the export industries.

6 hours ago, webfact said:

 

Over the next six years, CP expects to raise Bt220 billion to cover the construction and development costs, he added.

Well now it's clear, just a CP maneuver to make more money following the 7/11 example!
The general seems very happy and proud of this coup!

That's what happens when your bid is $2billion less than everyone elses

Not too optimistic about this project - better not sell the airport shuttle buses just yet.

On 10/25/2019 at 11:47 AM, vincent13 said:

Looking to bail out already!

Get it started. Claim Makkasan. Job done.