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ThaiBev looks to sell 20% of brewery unit in Singapore IPO

Listing expected to be biggest in years for SGX

BeerCo, which plans to list its shares on the Singapore Exchange, sells beer under several brands including Chang and Federbrau. The company also has Vietnam operations selling the brands Bia Saigon and 333.   © Reuters

BANGKOK/SINGAPORE -- Thailand liquor giant Thai Beverage announced a plan on Friday to sell a 20% stake in its brewery unit BeerCo through an initial public offering on the Singapore Exchange.

The parent company said the listing of Singapore-based BeerCo would be in the interests of ThaiBev's shareholders, as it would unlock growth potential in the beer business harnessed by a management team solely focused on achieving growth in the beer business.

The listing would also allow the brewery arm to have "direct access to debt and equity capital markets and be able to independently leverage on a wider range of funding options," ThaiBev said in a statement.

ThaiBev and BeerCo are both parts of larger conglomerate TCC Group, found by Charoen Sirivadhanabhakdi. Charoen was listed as the second-richest person in Thailand, with net assets worth of $14.1 billion as of Friday, according to Forbes. Charoen's third child and eldest son, Thapana, is the CEO and president of ThaiBev.

ThaiBev started voicing its intention to spin off and list the beer business in 2019. BeerCo was created in 2020 through internal restructuring to streamline and consolidate the brewery business and operations.

A ThaiBev spokesperson told Nikkei Asia that the company at the moment has neither a timeline for the listing nor a target for funds to be raised. Reuters reported in January that the listing could take place in the first half of 2021, giving the group an opportunity to raise $2 billion.

BeerCo carries out production and sales of beer under several brands such as lager-style Chang, German-inspired Federbrau and budget-line Archa. Vietnamese brands Bia Saigon and 333, which were obtained through a $4.8 billion acquisition of Saigon Beer Alcohol Beverage (Sabeco) in 2018, are also under BeerCo.

Sales of beer products outside Thailand and Vietnam will still be handled by the parent, according to the statement.

The beer unit recorded total revenue of 4.7 billion Singapore dollars ($3.5 billion) for the year ending September, an 8.4% drop from the previous year. Its profit after tax increased 60% yearly to SG$348 million.

ThaiBev has been listed and traded on the Singapore Exchange, or SGX, since 2016. The parent company originally sought a dual listing on its home soil but canceled the proposal after receiving a thumbs-down from domestic activists.

Although many Thais consume alcohol, drinking is considered an undesirable habit according to Buddhism, Thailand's state religion, leading ThaiBev to chase the beer unit's listing on the SGX.

BeerCo is the second company in the conglomerate to be listed in the past few years. Asset World, a property developer run by Charoen's second child, Wallapa Traisorat, debuted on the Stock Exchange of Thailand in October 2019. The company raised 41.7 billion baht ($1.6 billion) through the IPO.

For SGX, BeerCo's listing would be the biggest non-trust IPO in years and could be a catalyst to attract more stock investors from Singapore, Thailand and the rest of the world.

According to SGX data, the latest IPO of comparable size was one in 2012 by Malaysian hospital operator IHH Healthcare, which raised SG$2.48 billion at current exchange rates. In 2011, Hutchison Port Holdings Trust, a container port business trust, raised $5.45 billion.

Due to low liquidity in Singapore's stock market, many homegrown companies chose overseas markets for their IPOs. Among them are online gaming and e-commerce group Sea, which went public on the New York Stock Exchange in 2017 and is now Southeast Asia's most valuable company worth about $120 billion.

ThaiBev's unit listing would, therefore, be much welcomed by the SGX. The bourse had only five IPOs on the main board last year, much fewer than peer exchanges in Southeast Asia. The biggest IPO in Singapore last year was Nanofilm Technologies International, a local nanotech solution company that raised SG$510 million.

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