Thai Beverage and F&N Myanmar exposure for Jim Roger

For self-made Thai billionaire Charoen Sirivadhanabhakdi 苏旭明, the takeover of Singapore's Fraser and Neave Ltd (F&N) will add legions of assets to his drinks and real estate empire that already stretches from Southeast Asia to the United States.

Charoen, the son of a Bangkok street vendor whom Forbes ranks as Thailand's third-richest person with a net worth of $6.2 billion, is no stranger to a challenge.

He lost to Heineken NV last year in a battle for F&N's stake in Asia Pacific Breweries Ltd , the maker of Tiger beer, but forced the Dutch giant into a higher offer that made him a tidy gain on shares his group had amassed.

Beginning of 2013, Charoen emerged victorious when a consortium led by Indonesian tycoon Stephen Riady pulled out of the bidding for F&N's soft drinks, dairy and publishing businesses plus a real estate portfolio worth more than S$8 billion ($6.5 billion).
 
"He was ecstatic," said a person involved in the takeover who met Charoen just after his rival withdrew.

Charoen Sirivadhanabhakdi 苏旭明,69, has taken advantage of Asia's frothy debt markets.

The $11.2 billion deal, Southeast Asia's biggest takeover, adds popular brands and distribution networks to Charoen's 泰国酿酒 Thai Beverage PCL that brews Chang (Elephant) beer and makes spirits, energy drinks and instant coffee.

The Charoen-controlled entity that bought Singapore's Fraser & Neave for $11 billion in January leveraged up the balance sheet of his flagship company Thai Beverage, quadrupling its debt to core earnings ratio - a key measure of its ability to pay back debt. Charoen has indicated a cash payout from F&N will pay down some of that business's debt.

Myanmar

F&N is the leader in Singapore and Malaysia's soft drinks markets, according to Euromonitor, and it has a 55 percent stake in Myanmar Brewery Ltd, a joint venture that produces the rapidly emerging country's best-selling beer.


Thai Beverage Plc (ThaiBev) is seeking a greater presence in Myanmar through its partnership with Fraser and Neave Ltd (F&N), the Singaporean firm acquired earlier this year by the Thai drinks giant.

Bangkok Post

Thapana Sirivadhanabhakdi, ThaiBev’s president and chief executive, said the company is also considering importing Myanmar beer into Thailand, where many migrant workers from Myanmar live.
“Myanmar is the rising star of Asean, the one everyone is looking at, and the market there is similar to Thailand’s,” Mr Thapana said on the sidelines of last week’s Asean Economic Community (AEC) seminar in Bangkok hosted by KPMG Thailand.

This is our second recomendation for Myanmar exposure since our previous blog Post : Would Jim Roger invest Tan Chong gets sole Nissan rights in Myanmar

“With growing income per capita, there’s a huge opportunity for consumer goods and companies such as ThaiBev. We are already a player there and can build on the partnership with F&N.”

He said investment in Myanmar production will have to wait for improved infrastructure such as electricity and water…

The Myanmar government is prepared to relax limits on foreign ownership of breweries on a case-by-case basis, as it seeks to improve the appeal of the country to foreign investors, says a senior beer industry executive.

The Myanmar Investment Commission (MIC) offered four licences in January for international breweries to operate domestically.

Under the Foreign Investment Law, which the MIC oversees, each foreign brewer must enter a joint venture with a domestic company and can own a 51% majority stake in the Myanmar operation. Two of the four licences have been issued so far.

Charoen, 69, is also heavily into property. His privately held TCC Land owns shopping malls and hotels, including the Hotel Plaza Athenee in New York, and he has substantial assets in Singapore's booming real estate market.

In 2007, the Straits Times newspaper reported he bought 47 of the 48 units in a luxury Singapore condominium a day before a private preview sale. He would have bought the whole thing, it said, if local laws did not prevent a foreigner from owning all of the units in a single development.

The F&N acquisition fits the pattern of expanding Charoen's drinks business and is also a chance for his son, who heads Thai Beverage, to cut his teeth with a big international deal.

Thapana Sirivadhanabhakdi, the third of the billionaire's five children, was named president and chief executive of Thailand's top beer and spirits group in 2008.

As patriarch, Charoen has kept the business in the family in other ways. He is chairman of venerable Thai trading firm Berli Jucker , but son-in-law Aswin Techajaroenvikul leads it as it embarks on major expansion plans in the region.

Charoen Sirivadhanabhakdi, has taken advantage of Asia's frothy debt markets.


Ratings agencies remain wary. Standard & Poor's, which has downgraded Thai Beverage's credit rating, was critical about Charoen banking too much on the listed company to raise debt. "When a company shifts its risk tolerance so much in such a short period of time, it's something you have to question at this stage," Jean Xavier, a director at S&P, told Reuters.

FAMILY BUSINESS

Charoen has weathered crises before.

His father eked out a living by selling seafood omelets on the streets of Bangkok's Chinatown. The sixth of 11 children, Charoen demonstrated a sharp business brain at a young age, graduating late from fourth grade as he devoted his study hours to selling toys to his classmates, according to a biography.

He quickly rose from a supplier to state-owned distillers to having his own producer's liquor license, earning the "Whiskey Tycoon" moniker, though he himself is teetotal, say bankers and businessmen who have worked with him.

Starting in the trading business, Charoen and his family expanded aggressively in the liquor, sugar milling, banking and insurance fields during the 1980s and early 1990s.

Charoen entered the Thai beer market in 1995 by setting up a joint venture with Danish brewer Carlsberg to produce Chang. He later formed Beer Thai Co to manage marketing and distribution.

Backed by his father-in-law, Charoen bet on the financial sector, buying stakes in First Bangkok City Bank and Maha Thankit Finance and Securities - both of which collapsed during the 1997 Asia financial crisis.

Asia's financial crisis of 1997/98, which led to the closure of financial institutions owned by his family, forced Charoen to leave Thailand and stay overseas for a while.

His fortunes changed after the firm intensified a battle for Chang's market share in 1999 by cutting its wholesale prices and gained ground on rival Singha Corp, which has been selling Thailand's best-known beer Singha (Lion) since 1933.

Beer Thai was later restructured and became part of Thai Beverage before listing in Singapore in 2006 as it faced opposition from monks and anti-alcohol activists at home. Since 2009, the beer business has made losses due to tax burdens and Chang's loss of market share.

Thai Beverage bought nearly 65 percent of Serm Suk PCL , the local bottler of Pepsi, in 2011 to expand its soft drinks business. In 2008, it took over Thai green tea and sushi maker Oishi Group for $214 million.

Charoen has also ventured beyond drinks and real estate.

In 2004, he expressed interest in buying a stake in English soccer giants Liverpool FC with then Thai Prime Minister Thaksin Shinawatra as a potential partner in a 25 percent share.

The agreement fell through but Charoen stayed close to English soccer by winning a deal to advertise Chang on the shirts of Everton, Liverpool's biggest rivals.

Dubbed the "Takeover King" for his incisive acquisitions of stakes in companies struggling after the crisis - he expanded closer to home , focusing on Southeast Asia - Charoen is now grooming his children, including eldest son Thapana, to manage his TCC empire, which boasts a string of luxury hotels spanning four continents. His wife Wanna has been described as his "No. 1-1/2", rather than Number 2, in recognition of her major role in managing the family business - estimated by Forbes to be worth $11.7 billion.

"The Sirivadhanabhakdi family are very humble, low-key people," said Prinn Panitchpakdi, Thai country head at broker CLSA. "They're very religious and attend Buddhist ceremonies."

To help finance the Fraser & Neave buy, Charoen's Thai Beverage borrowed S$3.3 billion from seven banks for five years, replacing an earlier bridge loan, while his TCC family vehicle took a further S$9 billion jumbo bridge loan - the biggest by a Thai borrower - Thomson Reuters publication Basis Point reported.

Bridge loans are typically short-term and widely used by companies in M&A deals, replaced later by larger or longer-term financing.

"From a ratings point of view, in the case of ThaiBev/TCC, the track record of integrating very large acquisitions is largely untested," said S&P's Xavier. "When you have operated at low leverage for a long time and your debt load spikes very suddenly, how will the company manage a downturn?"

($1 = 1.2539 Singapore dollars) ($1 = 30.4700 Thai baht) = Reuters

CIMB recomended Thai Beverage for Brewery exposure on 27 Jun 2013 compare to  Carlsberg's and Guinness's . Thai Beverage also one of rare counter benefited from Asean Trading Link launch last year,  where it is one of most interested Singapore counter by Thai investor

Update : F&N faces claim over stake in Myanmar brewery
Myanmar military aims to calm fears of economic interference

苏旭明持星狮29.4%

泰国大象牌啤酒（Chang Beer）的创始人苏旭明（Charoen Sirivadhanabhakdi），今年早些时候斥资110亿美元（330亿令吉），收购了新加坡软饮料及房地产公司星狮集团（Fraser & Neave Ltd.），以便扩大其在东南亚其他地区的业务。


泰国富商苏旭明旗下TCC Assets公司，在2月8日以每股9.43新元（23.55令吉）的价格再购得星狮集团（Fraser&Neave）0.01%股权。

截至当天，星狮集团其他股东已答应卖给TCC Assets的股权，已达到29.4%。结合泰国酿酒（Thai Beverage）所持股权，两公司共持有星狮集团77.45%的股权。

苏旭明早前将竞购新加坡星狮的献购价从每股8.88新元（22.18令吉）上调至9.55新元（23.85令吉），从而击败竞争对手，即印尼豪门Riady家族旗下华联企业（OUE）为首的OUE Baytown财团，成为该新加坡公司的潜在新股东

星狮集团（Fraser and Neave）宣布，原班董事会已经全部卸任。

目前在星狮集团董事会的是泰国富商苏旭明的女婿佐堤芭、泰国酿酒（Thai Beverage）财务总监西迪猜、翁兴年、以及苏旭明的儿子Thapana。

星狮集团表示，将委任另外五名董事，并设立董事会的各个委员会，包括审计委员会，以符合新交所挂牌条例的规定。

 

星狮集团（F&N）考虑把房地产和非房地产业务拆开，以便为股东释放价值。

 

星狮集团的非房地产业务包括汽水、食品和印刷出版。

它在缅甸也有酿酒业务。

目前星狮集团已被泰国富商苏旭明收归他的企业王国，苏旭明通过TCC Assets和在新加坡上市的泰国酿酒（Thai Beverage），在今年1月间击败华联企业为首的财团，成功全面收购了星狮集团。

 

星狮集团（F&N，3689，主板消费产品股）逐步克服泰国水灾、失去可口可乐分销权及重新搬迁大马厂房导致成本走高等挑战，目前已经进入复苏阶段。

由此，星狮集团总执行长拿督黄维声更看好今年的增长前景。

另一方面，虽然泰国亿万富翁苏旭明透过TCC集团子公司收购新加坡星狮集团，将为星狮集团创造协同效应，但黄维声认为，公司能靠内部增长填补失去可口可乐分销权所造成的影响。

“若内部增长维持每年6%至8%，销售量便可在3、4年里，完全恢复至失去可口可乐分销权前的水平。”

即使失去可口可乐分销权，集团软饮业务还是很赚钱，这显示公司已进入复苏阶段。

黄维声在今日举行的星狮集团2013财年首半年业绩汇报会上，如是表示。

黄维声说，接下来，星狮集团将透过加强品牌及扩大分销网络，带动集团增长。

加强“Seasons”品牌

星狮集团今年将加强“Seasons”品牌，预计将带动集团表现。

泰国水灾后，星狮集团泰国工厂产能扩大10%。目前，产能使用率平均达60%至70%。

至于受泰国水灾影响的厂房，星狮集团至今已获理赔10亿6200万泰铢（约1.07亿令吉），理赔总额为11亿泰铢（约1.1亿令吉）。

引进Oishi绿茶

今年6月，星狮集团将协助苏旭明旗下的泰国酿酒（Thai Beverage）引进知名品牌———Oishi绿茶来马销售。

黄维声说：“短期内，我们将只是泰国酿酒的分销代理，无法协助生产，因为仍未取得清真认证（Halal Certification）。不过，长期而言，我们会转型成该集团的加盟商，也会生产他们的产品。”

针对是否会将国内软饮出口至泰国的提问，黄维声回应：“我们会探讨这个课题。”

目前，星狮集团已在泰国分销100Plus，可是，要让泰国消费者接受仍需时间。

集团也将加速拓展印度支那业务。

目前，公司在大部分中南半岛国家都已设分销中心。

黄维声表示，中南半岛业务由泰国营运负责，因为语言、距离及文化都较接近。


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