Samart Corp is considering divesting its 100% stake in Cambodia Air Traffic Service which can offer significant upside potential as the Cambodian economy continues to grow and open up to foreign investment

Business >> Monday August 27, 2007

COMMUNICATIONS

Samart may sell Cambodia air traffic stake
NUNTAWUN POLKUAMDEE



Samart Corp is considering divesting its 100% stake in Cambodia Air
Traffic Service (Cats), according to unnamed sources.


Cats, which has 22 years remaining on its 30-year concession from the
Cambodian government to offer air traffic control services, could
fetch a hefty price from foreign buyers, considering the economic and
tourist potential of the country.


One source said foreign buyers have suggested a pricetag as high as $1
billion to buy the company.


But advisers to the Vilailuck family, the major shareholders of
Samart, are advising that a share sale should only be for a 20% to 25%
in Cats.


''The value of the company rests with the concession and monopoly
rights. The protection period has a significant amount of time
remaining, and the potential value is very high,'' one source said.
''There have been a number of offers so far. But no firm buyer has yet
been selected.''


Sources said Samart's investments in Cambodia offer significant upside
potential as the Cambodian economy continues to grow and open up to
foreign investment. Economic growth over the past three years has
averaged 11.4% and is projected to reach 9% this year, compared to
just 4% for Thailand.


Cambodia's favourable location in Indochina also offers benefits to
Cats for air traffic moving to Thailand, Hong Kong and Vietnam.


Watchai Vilailuck, the Samart president, said no decision had been
made on the company's policies toward its Cats subsidiary. Samart
wanted to expand its I-Mobile brand into the region, given the
significantly higher margins offered to the company from sales when
compared with handset sales for international brands like Nokia or
Motorola.

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