Thailand & Singapore: ThaiBev to list nearly 20% of its BeerCo unit on the Singapore Exchange

Thai Beverage (ThaiBev) has confirmed it is looking to spin off and list its brewery unit BeerCo on the Singapore Exchange (SGX) mainboard, The Business Times reported on February 5.

In a regulatory filing on February 5, the beer and liquor giant said it has received a no-objection letter from SGX for the listing of nearly 20 per cent of BeerCo.

BeerCo has three breweries in Thailand as well as an interest in a network of 26 breweries in Vietnam. Its business includes the production, distribution and sales of beer including the Chang and Bia Saigon brands.

The group booked a profit after tax of S$348 million on S$4.7 billion in revenue for the full year ended Sept 30, 2020.

ThaiBev said it sees "significant growth potential" in its beer business. It believes the business could be better-developed with a dedicated board of directors and management team, and with direct access to debt and equity capital markets as a separately-listed entity.

"ThaiBev believes that the BeerCo group's position as one of the leading beer players in South-east Asia and its growth potential offers a distinct and compelling growth story," it said.

Meanwhile ThaiBev could use part of the proceeds generated from BeerCo's IPO to reduce debt and strengthen its financial position to invest in future business expansion plans.

ThaiBev is also of the view that its listing of BeerCo will provide a transparent valuation benchmark for BeerCo - allowing the core business of ThaiBev to be assessed and valued more distinctly.

The group's announcement comes a week after Bloomberg reported on the potential listing.

Bloomberg cited sources with knowledge of the matter saying that the group was seeking an estimated US$10 billion valuation for BeerCo, with the listing possibly taking place as soon as the second quarter of 2021.

Shares of ThaiBev ended on February 4 down 2 Singapore cents or 2.5 per cent at 79.5 cents.