Fixed broadband provider Triple T Broadband (TTTBB) has proposed an advance payment of 3 billion baht in optical fibre cable (OFCs) rental fees to Jasmine Broadband Internet Infrastructure Fund (JASIF) within two years if the fund's unitholders agree to amend the rental contract in line with a demand made by Advanced Info Service (AIS), which is pursuing the acquisition of TTTBB and investment in JASIF.
The proposal, announced by TTTBB's parent Jasmine International Plc (JAS), was communicated to the Stock Exchange of Thailand yesterday.
In July, AIS announced its plan to buy TTTBB and invest 19% in JASIF in a deal worth 32.4 billion baht in total.
JAS is the biggest shareholder of JASIF with a 19% stake.
Under the acquisition agreement with JAS, AIS said key precedent conditions include the approval of the unit shareholders of JASIF to amend terms and conditions of relevant agreements between TTTBB and JASIF.
JASIF owns fibre-optical cables spanning 1.6 million core kilometres, currently leased by TTTBB for its broadband internet service under the brand 3BB.
AIS wants to terminate the existing rental assurance agreement and marketing service agreement but want to extend the term of the main least agreement until 2037, from 2032.
Concerns have been raised as to whether JASIF's unitholders will approve the amendment to the existing agreements in their meeting slated for Sept 23.
In a move seen to encourage JASIF unitholders to approve it, TTTBB has proposed to pay the rental fee for OFCs in advance.
The first instalment payment of 1 billion baht will be paid to JASIF once AIS succeeds in acquiring TTTBB and investing 19% in JASIF.
The second instalment payment of 1 billion baht will be made on the first anniversary date and the third instalment payment of another 1 billion baht will be made on the second anniversary date.
The advance rental fee payment is considered as the payment for OFCs under the main lease agreement for January 2030 and 2031 at the rate of 300 million baht and as the payment of the rent of OFCs under the main lease agreement for January 2032 to 2037 at the rate of 400 million baht.
Tee Seeumpornroj, chief finance officer of AIS, sad the company will "assist TTTBB in procuring the source of funds for the payment of such advance rental of OFCs".
He said the transactions involving the purchase of TTTBB and investment in JASIF are expected to be completed in the first quarter next year.
As the proposal was raised, JASIF postponed its unitholder meeting to Oct 18 to give more time for unitholders to consider it.
