ThaiBev to File for Mega Singapore IPO of Brewery Unit

  • In Business
  • 2021-02-05 02:13:55Z
  • By Bloomberg

(Bloomberg) -- Thai Beverage Pcl said Friday it plans to list its brewery unit on the Singapore stock exchange, kicking off what could be the biggest initial public offering in the city-state in a decade.

The maker of Chang beer announced early Friday that it had received a no-objection letter from Singapore Exchange Securities Trading in relation to the proposed spin-off listing of its brewery business. Shares rose as much as 4.4% in early trading, surging the most since November.

The brewer, owned by Thai tycoon Charoen Sirivadhanabhakdi, will sell up to about 20% of the total number of issued ordinary shares of BeerCo Ltd. A float could raise around $2 billion, according to people familiar with the transaction who asked not to be identified as they are not authorized to speak publicly. A representative for the company declined to comment on the size of the float.

The announcement to list the brewery unit will be a "massive" boost for Singapore-listed ThaiBev's shares, said Nirgunan Tiruchelvam, head of consumer sector equity research at Tellimer.

Because ThaiBev is the second-largest beer producer in Thailand and the largest in Vietnam, the beer unit's assets are "exemplary", he added.

ThaiBev's IPO of its brewery unit could be the Singapore bourse's biggest since Hutchison Port Holdings Trust raised $5.5 billion in 2011. It would also buoy first-time share sales in the Southeast Asian country. IPO volumes plunged to $915 million last year, the lowest since 2015, according to data compiled by Bloomberg. There have yet to be any IPOs in the Southeast Asian nation this year.

ThaiBev had initially planned to spin off its brewery unit last year, but the plan was put on hold after the coronavirus pandemic hit its business, with bars and restaurants closing and alcohol sales banned, people familiar with the matter have said. The planned IPO will likely value the brewery unit at about $10 billion.

ThaiBev is best known for producing Chang, a lager whose green bottles are adorned with an image of two elephants. It also brews Archa beer and the German-inspired Federbrau brand. In 2017, ThaiBev's Vietnamese affiliate bought a controlling stake in Saigon Beer Alcohol Beverage Corp., the country's largest brewer, for about $4.8 billion.

The beer business to be listed had revenues of nearly S$4.7 billion ($3.5 billion) for the fiscal year ending September 30, with profits after taxes of about S$348 million.

Apart from the brewery business, ThaiBev runs distilleries that produce liquor, including SangSom rum, Meridian brandy and Drummer whiskey. It owns about 28% of Singapore's Fraser & Neave Ltd., which sells 100Plus soft drinks and Magnolia dairy products, data compiled by Bloomberg show.

Charoen is Thailand's richest person with a net worth of about $16.3 billion, according to the Bloomberg Billionaires Index.

(Adds analyst comment in the fourth paragraph.)

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