True Corporation Public Company Limited (TAF1.F) Earnings Call Transcript & Summary

Thank you for joining on such short notice. We really appreciate it. This conference call is in relation to the news that we have released one hour ago. Please refrain your questions to this topic only. We are in our silent period and cannot address anything else. I will hand over to Khun Sigve. He will give you a brief. [Operator Instructions] Thank you.

Yes. Good afternoon and also good morning to those of you not being part of Asia. Just a brief summary of the information that the 2 shareholders have sent out today. Earlier today, the company, we got a notification from Telenor that they have agreed with the company, Arise to sell 24.95% of their shareholding in True to a price of THB. Based on that, we sent out the stock release to the True shareholders from the Stock Exchange in Thailand and sold the Telenor back in [indiscernible]. As you also know from the release, there is a call arrangement between the 2 parties and that will expire in 2 years. Arise is a company fully owned by Suphachai Chearavanont, the current Chairman of the Board of True and that company will then be the shareholder of True [indiscernible] that company also be the main share of some public digital assets that you have in the CP Group being the data center company, being the True model company and also [indiscernible]. [indiscernible] be a part of the advise company as per [indiscernible] the Executive Chairman of the company. So that is the news. This news does not affect the company as such. We will continue exactly with the business strategy we have talked to you about before and also that we will go into more detail on when we launch our Q4 financials, then we'll talk about 2026. It is also becoming 2 years strategy. That strategy has been developed together with both Charoen, the shareholder, but also with Suphachai Chearavanont as the Chairman of the Board. So there will not be any change to that strategy. There will not be any change to the way to operate either. The management team will continue as is. I will continue as the Group CEO and in addition, as I said, also be a part of Arise [indiscernible] structure. [indiscernible] So that's basically the short story. I'm not able to answer questions on behalf of Arise or on behalf of Telenor. I'm to free to answer any other questions that you will have. But let me once again say that you should not see this as a change of neither the governance of True nor the top management of True nor the direction of True going forward. I think that was an intro. Then we are open for Q&A.

Thank you, Sigve. The first question from Piyush. I will once again request all of you please make sure your questions are relevant to this topic today only, and please refrain from more than 2 questions. Thank you. Piyush? We can't hear you, Piyush. Sorry, Piyush, we are going to move on to the next question, maybe you can take some time to adjust your equipment. Then Khun Pisut?

Can you hear me?

Yes, we can.

Two questions as you asked. The first one is I just want to know that True and also Telenor, do they have any lockup on the shares that you transact and for how long? This is my first question.

Yes. The only answer I can give to that is what I have communicated and that is a 2-year call/put option, which means that after 2 years, Telenor will be out of the company completely. But any more details than that, then you need to ask the [indiscernible].

Okay. Let me clarify a bit. You mean the put and call option, this is for the remaining 5% that Telenor holds, right? But 24%, the amount of the shares that under the transaction, there is no any lockup period, am I correct on that?

This announcement is yet to be closed the deal due to some procedural processes and that will take some weeks or a couple of months maybe before we can finally close the deal. And when that is done, then this share will be effective immediately.

Okay. My second question is about the transaction price, which is THB 11.7 according to what Telenor said. It would be great if you can walk through that how the price come up at THB 11.7. Is this looked -- I mean, it is a bit too early to say to me, but I'm not sure what's your thought on that.

That is a good question. But of course, I don't have any thoughts on that. That is between the two shareholders and their negotiations. So that you need to -- that question you need to ask Telenor about.

Piyush, I believe your mic is working? No, sorry, we cannot hear you.

Maybe you can type in your question on the comments, Piyush.

Yes. Then let me move on to Ranjan.

Apologies, I'm going to keep my camera off. I'm working from home. Two questions. Firstly, is there going to be a tender offer? Second question is a lot of the management and Board members come from Telenor. Now that Telenor is exiting, possibly fully, what is the commitment of the management and the Board members to be involved with True?

Yes, a fair question. No, there is not -- a mandatory tender offer. This is just a deal between the two shareholders. So as said on the previous question, as soon as the deal is closed, then the share transfer will happen. On the second question, I do not have any plans to change any of the current management regardless of which nationalities they have or where they come from. However, as you know, I have done changes in the management team over the last 9 months since I took over this group CEO position and changes will come in the future. So I'm not saying that everything will be exactly the same forever. But as a part of this deal, there is no changes in management as a consequence of that.

So if I can just have a quick follow-up. Any of the management team who are on a secondment or on the payroll of Telenor where they might have to move back to Telenor?

As I said, yes, there are some of the management team that are secondment from Telenor and are on expert contract. However, I do not -- as I said the deal is such, it does not require me to change any of them. So that will be at Telenor [indiscernible] handling them [indiscernible]. So hopefully there continue to stay on and continue do exactly what we plan to do for this year and the coming years. So there is no plan to change any of them because they are secondment from Telenor.

Okay. But the Board structure will change, I'm guessing.

Yes, of course, the structure will change. So Arise will then have Board members, and [indiscernible] will have board members, and then Telenor after the closure of this deal will have Board members.

Piyush, one last try? No. Sorry, Piyush. Can you send these questions to me?

Apologies for that. Sorry, this may be repetitive because I was trying to solve my audio and I didn't hear the earlier response. What kind of led -- firstly, what led Telenor to exit once the dividends have started? And any changes in management and governance structure and particularly on the governance side, how will things change? Secondly, any changes in your strategy, go-to-market? And would True Digital Wallet and Data Center, those will be merged into True or you will focus at the listed level only on the three segments which you have currently?

Yes. Third question first. Well, I look at Telenor [indiscernible] this service, I'm employed by CP Group, and I'm secondment from both the 2 shareholders to be a CEO in True. So I cannot answer Telenor questions. So you have to ask Telenor about why they found it right to sell their shares at this time. To your second question, no. The change in governance will be a change in the composition of the Board. As I said, CP will have the Board. Arise [indiscernible] on the Telenor shares, will also have [indiscernible] as long as they keep their 5% shareholding. Other than that, there will not be any changes. I will be the group CEO as I have been in the last 9 months. And I plan to keep the structure as it is now and also the team as it is now. So there is nothing that triggered changes in terms of or the way we operate the company because of this deal. [indiscernible] will not be a part of True. There are assets that are going to be owned by Arise that also have [indiscernible].

Okay. And in terms of capital allocation, like whatever you have communicated in the past that kind of remains similar in terms of strategy going forward?

Yes. Do not expect any strategic changes. Do not expect any capital allocation changes. Do not expect any financial policy changes because of this deal. For that, we have communicated [indiscernible] have been in close operation with the change of the Board, [indiscernible]. So he is fully backing that and no change on that because of the change in shareholder.

And if I may ask one thing, like how is Arise funding this acquisition?

That you have to ask Arise about. I don't have visibility to that.

Next in line we have Khun Nuttapop.

Two questions from me. The first one is about -- I'm not sure whether by losing Telenor as a major shareholder, if I may, we would have something like debt headroom, credit line, credit rating, facilities from whatever Telenor has been helping us in getting from European banks or something like that. Also the asset procurement or whatsoever that we take advantage from Telenor too. Would that change?

Telenor has not really been involved in that, that's handled by especially the partner team, True. So we don't see any changes in the way they handle our debt or restructuring of debt or refinancing. And as I said, no change in the financial policy either. When it comes to the procurement services that we are getting from Telenor, that is a service we have bought from Telenor utilizing debt procurement company. And going forward, we will look for opportunities to continue to have service contracts with people that can help us to do procurement cheaper and better. So there's no change to any of these.

All right. My second question on tender offer things. I know that this time they bought already 24.9% of the stake, but theoretically for next time that they added another 5% to Arise, and that would technically surpass to 25% ratio. Should we expect the tender at that point in stead, theoretically?

Yes, Nuttapop, good questions, but I cannot answer a theoretical question, partly because that is 2 years but [indiscernible] also because that's an issue that you have to talk to Arise about, not to the management team.

Okay. Just one follow-up, please. How about the call/put option, exercisable from either parties, right, since you say call and put?

It is a call and put for [indiscernible] to what the meaning of call and put is.

There are questions in the chat box, which have already been answered by Khun Sigve, so I'm not going to touch upon them. Next up, Khun [indiscernible].

I have two questions. True has become much more rational after the merger. And now if this deal goes through, there's going to be a change in Board of Director. Do you think is there any possibility that there would be a policy change, maybe not immediate change, but over the long term? And then second question is that you provided the long-term guidance. Looking forward for the next 4 or 5 years, do you think that guidance is still valid under the new Board of Director?