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ThaiBev puts beverage unit IPO in Singapore on hold

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Thailand’s largest beer maker cites surge of coronavirus cases behind it’s decision

By: Tricia Ang | 20 April 2021

Photo from Nikkei Asia

The planned initial public offering (IPO) of Thai Beverage’s brewery subsidiary, BeerCo, on the Singapore Exchange has been postponed, the company said Friday, citing a revival of coronavirus cases in its key markets.

The deferment came in “view of the current uncertain market condition and volatile outlook, aggravated by the worsening COVID-19 pandemic in Thailand and other countries, which are not conducive for the proposed spinoff listing,” ThaiBev said in a statement.

The decision was made two and a half months after the IPO was proposed. On April 2, it announced that it had received a conditional eligibility-to-list letter from Singapore Exchange Securities Trading, which is one of the conditions for listing.

“ThaiBev will closely monitor the market conditions, evaluate and explore opportunities to maximize shareholders’ value,” ThaiBev said. “The proposed spinoff listing will be reviewed at the appropriate time.”

In the original plan, the liquor giant sought to sell a 20% stake of the brewery unit through the IPO, which would have given the group an opportunity to raise $2 billion, according to a Reuters report in January.

The pandemic is in its third wave in Thailand. The Thai government declared a two-week ban on alcohol sales in restaurants in 18 provinces, including Bangkok, on Friday. Bars, pubs, karaoke clubs, bathing facilities, and all other nightlife entertainment outlets around the country were also ordered to close for 14 days. These initiatives, aimed at taming the third wave, will have an adverse influence on BeerCo’s product sales.

The Singapore-based subsidiary produces and sells beer under several names, including Chang, a lager-style beer, Federbrau, a German-inspired beer, and Archa, a budget-friendly beer. BeerCo also owns the Vietnamese brands Bia Saigon and 333, which were acquired in 2018 via the $4.8 billion acquisition of Saigon Beer Alcohol Beverage.

ThaiBev and BeerCo are both subsidiaries of the conglomerate, TCC Group, which was founded by Charoen Sirivadhanabhakdi. According to Forbes, Charoen was the second-richest person in Thailand as of Friday, with a net worth of $13.4 billion. Thapana, Charoen’s third and oldest son, is the CEO and president of ThaiBev.

Since 2006, ThaiBev has been listed and traded on the Singapore Exchange. The parent company had hoped for a dual listing on its home turf, but it was shelved after receiving negative feedback from domestic activists. Thailand’s state religion, Buddhism, considers drinking to be an undesirable habit.

The Singapore Exchange could also suffer as a result of the postponement. BeerCo’s IPO would have been the largest non-trust IPO in years, potentially attracting more stock investors from Singapore, Thailand, and other parts of the world.

In 2019, ThaiBev announced its intention to spin off and list its beer business. Last year, BeerCo was formed as a result of internal restructuring aimed at streamlining and consolidating the brewery’s business and operations.

Credit: Nikkei Asia