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NEWS UPDATES 12 August 2010

Thaicom not rattled by Thaksin ruling

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Thaicom Plc says it is not concerned about a government move to re-examine its satellite concession and shareholding structure after the Supreme Court's rejection of a final appeal by ousted prime minister Thaksin Shinawatra in his asset seizure case.

Commenting on yesterday's ruling, ICT Minister Juti Krairiksh said he was ready to act raised by the Supreme Court in its original February 26 ruling against Thaksin.

He said he would meet with the ministry's legal advisers to examine details of the satellite and mobile phone concessions that the Supreme Court had singled out. The court concluded that while prime minister, Thaksin had abused his authority to secure concession changes favourable to companies in Shin Corp, which his family sold to Temasek Holdings of Singapore in 2006.

A committee set up earlier to look into the concession amendments has concluded that Thaicom should return to the ICT Ministry the US$6.7 million in insurance compensation it received after Thaicom 3 was taken out of service prematurely because of a power failure.

The committee also concluded that Thaicom's iPSTAR broadband satellite was not a valid backup for Thaicom 3, which was for broadcasting, and the company would be obliged to launch a new satellite to comply with its concession.

As well, it said Shin Corp needed to raise its shareholding in Thaicom back to 51 percent from 40 percent.

But Mr Arak said Thaicom was legally a Thai company with up to 60 percent of its shares held by investors in the stock exchange.

He said the problems about the backup satellite reflected a difference in interpretation. The company regards iPSTAR as a valid backup and every satellite launch has been done with the ministry's consent.

But Arak Chonlatanon, the chief executive of the company founded by Thaksin also said that Thaicom was optimistic it would make a profit this year if its Mfone mobile service in Cambodia improves and the company can settle agreements for iPSTAR transponder sales in the Philippines, Malaysia and Indonesia in the second half.

He said the company should have a good second half as it has a contract backlog worth US$120 million, which would result in operating results for 2010 returning to the black. However, he said results from Cambodia remained the key factor. Mfone in Cambodia earned 374 million baht in revenue in the second quarter, down from 560 million in the same period last year.

The company expects a turnaround, however, as the Cambodian government recently announced minimum prices for the industry, where nine companies are competing, to ease a price war.

The first-half loss totalled 308 million baht on consolidated revenue of 3.43 billion this year, compared with a loss of 22 million on revenue of 3.51 billion a year ago.

Mr Arak also said Thaicom was ready to move its expired Thaicom 2 satellite from the present orbital slot of 78.5 degrees East to 50.5 degrees East to reserve the country's orbital slot rights. The company has already transferred its customers from Thaicom 2 to Thaicom 5.

Thaicom shares (THCOM) closed yesterday on the Stock Exchange of Thailand at 6.30 baht, down 25 satang, in trade worth 60.9 million baht.

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