SINGAPORE (Jan 17): Late last year, Thai Beverage (ThaiBev) confirmed news reports that it was ex­ploring a potential listing of its brewery business, albeit at the “early stages”. Sub­sequently and separately, the company denied news reports that claimed it was seek­ing a buyer for its business in Vietnam. The company clarified that such claims are “false and without merit”. “[ThaiBev] will make fur­ther announcement(s) as appropriate should there be any material developments which warrant disclosure, in accordance with rele­vant Thai and Singapore regulations,” it said in a Dec 18 filing.

Still, assuming that ThaiBev decides to pro­ceed with the listing, the company is set to ben­efit. “As a holding company (ThaiBev), they will get better value for their subsidiary [listed brew­ery business],” Nirgunan Tiruchelvam, head of consumer sector equity research at Tellim­er, told The Edge Singapore in Issue 911 (week of Dec 9, 2019) last year. “The spin-off would be a positive note.” He added that the listing could include moving some of ThaiBev’s debt off its balance sheet.

UOB Kay Hian analyst Lucas Teng estimat­ed that the listed brewery business could be valued at an enterprise value (EV) of 23 times its ebitda. This was assuming that ThaiBev is aiming for a US$10 billion valuation and that it accounts for the segment’s interest-bearing liabilities and minority interest. “This is high­er than peers’ average of 15 times. We esti­mate that Sabeco is currently trading at ap­proximately 20 times EV/Ebitda,” he wrote in a Dec 3 note.

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