Orient Thai plans listing after tie-up HK Developer krrn on share-swap deal Boonsong Kositchotethana

Bangkok Post 6 July 2004

Privately owned Orient Thai Airlines, better known locally for its One-Two-Go budget carrier, is in talks with a major Hong Kong-based real estate business about forming an alliance ahead of listing on the Thai stock market early next year.

The Hong company, described as one of the territory's top 10 real estate players, would swap a 25% stake for an equal number of Orient Thai shares under the deal being discussd.

Udom Tantiprasongchai, the chief executive and owner of Orient Thai, said the discussions were 80% completed and a full agreement was expected within a month's time.

The Thai airline has also begun reorganising its accounting system to meet Stock Exchange of Thailand (SET) regulations.

Orient Thai plans to offer new shares worth up to 30% of its capital to the public early next year, making it the kingdom's first.privately owned airline to list on the main borad.

Proposals for the new alliance include having Mr Udom assist in running a "guasi low-cost" carrier the Hong Kong company has recently set up to focus mainly on flights between Hong Kong and destinations in mainland China.

Mr Udom said that it was not his original intention to list Orient Thai on the SET as he did not see a need to raise funds from the public.
"The main driving force now is to get some of the protection that is normally rendered to a SET-listed company and also to make the company's operations more transparent to the the public," he said.

He maintains that his company has been subjected to bullying from certain autorities and unfair competition from rivals with political baking.

He said the funds raised in the public offering would be used to modernise the fleet, including for new aircraft purchases as well as supporting domestic and regional route expansion.

Orient Thai's current fleet consists of eight 747-200 jumbo jets and two Boeing 757s. Mr Udom said recently that as many as eight Boeing 737s would be acquired by the company.
Orient Thai operates scheduled flights between Bangkok, Phuket and Hong kong, and from Bangkok to Seoul.
The budget affiliate One-Two-Go, which took to the skies last December, offers scheduled services from Bangkok to Chiang Mai, Chiang Rai, Hat Yai, Phuket and Udon Thani.

In the near future, he said, flights from Bangkok to Surat Thani, Ubon Ratchathani, Khon Kaen and Krebi would be added. Overseas, it is working on a no-frills service from Bangkok to Singapore and Kuala Lumpur.

One-Two-Go is also geariong up for its first regional service, Bangkok-Hong Kong making it the first budget airline to ply that busy route.

Although One-Two-Go has been bleeding red ink-accumulated losses to May stood at around 30 million baht

Mr Udom said Orient Thai as a company had been profitable since 2001. He did not provide figures. Orient Thai's registered capital is 500 million baht and it has a workforce of about 600.

Mr Udom said the fact that several financial advisers had offered to handle the company's positive fundamentals and potential appeal to investors.

"I would imagine that many of them appreciate our fighting spirit, as a Thai airline taking on heavyweight competitors.like Thai Airways International, Nok Air and Thai AirAsia." he said.

Mr Udom said he would continue to hold at least a 50% stake in the company after the IPO.

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