JASIF offers stable and attractive returnInvestors shall have the opportunity to receive return in investment in the form of capital reduction when JASIF has excess liquidity and dividend payment when JASIF has sufficient retained earnings. JASIF's policy is to pay dividends to unitholders at least twice a year at a rate of at least 90% of the "adjusted net profit" in line with the prospectus. In 20151, it is expected that the first-year distribution to investors will be approximately 8.6%-9.0%, comprising of 7.8%-8.2% of dividends and of capital reduction at a rate of 0.8%. Both figures, dividend yield and capital reduction rate, are calculated from fund size range of Baht 55,000-57,750 million based on the assumption that the main revenues come from OFCs rental income after deducting operating and other expenses. The assumptions are based on pre-determined revenues and expenses that are contractually fixed and not expected to be subject to material adverse fluctuations during the projection period ending on 31 December, 2015 and are not reliable.
Potential upside opportunity to invest in additional broadband related assets in the future and from third party lesseesJASIF is entitled to exercise the right of first offer if, in the future, TTTBB expresses its intention to sell additional optical fiber assets which TTTBB uses in its business operation to any third party and having an offer price exceeding THB 1,000 million within any twelve-month period. Also JASIF, will benefit if the OFC can be leased at a rate higher than what has been agreed in the Rental Assurance Agreement between TTTBB and JASIF.
Conducive industry backdropThe OFC network is one of the key infrastructures of the Broadband Internet industry which is expected to experience high growth. Thailand is one of the most underpenetrated markets in the region with only 24.6% of total households having access to internet as of December 2013 compared with 70.3%-99.6% in Japan, Hong Kong, Korea and Singapore. It is expected that penetration of broadband internet in Thailand will grow to 35.4% and 44.0% by 2016 and 2019, respectively. (Source: Media Partner Asia Limited)
Opportunity to get return from JASIF's Lessee — TTTBBTTTBB will be the lessee of the OFC. TTTBB generated revenues of THB 9,623 million in 2013, with a compounded annual growth rate of 22.6% per year from 2011 to 2013, and THB 8,196 million for the latest 9 months ended September 30, 2014 which is up 15.7% Year-on-Year. EBITDA in 2013 amounted to THB 4,610 million, and has grown from EBITDA of THB 2,850 million in 2011 representing a compounded annual growth rate of 27.2% per annum from 2011 to 2013. For the latest 9 months ended September 30, 2014, TTTBB generated EBITDA of THB 4,098 million which is up 17.5% Year-on-Year.
Tax exemptionIndividual investors are not subject to capital gains tax and will get tax exemption for dividends received from the Fund for a period of ten years from the registration of the Fund2.
The Sponsor and Lessee, JAS and TTTBB, are managed by executive team with extensive experience in telecommunication businessThe executive management teams of JAS and TTTBB comprise of personnel with vision and extensive experience in the broadband and telecommunication businesses. JAS will hold an aggregate of 33.33% of the issued and outstanding Investment Units of the Fund for three years and not less than 19% of the total number of Investment Units for the period between Years four to six. The initial stake of 33.33% is the maximum number of units that JAS is legally allowed to hold following the establishment of the fund and demonstrates a strong commitment from the sponsor to JASIF.
- Investment involves risks. Investors should study the information in the prospectus before making an investment decision.
- The approval from the Office of the Securities and Exchange Commission of Thailand (the "Thai SEC") for the establishment of JASIF on 20 January 2015 is not a representation from the Securities and Exchange Commission, the Capital Market Supervisory Board or the Thai SEC of the completeness and accuracy of information used in the offering nor a guarantee of return on investment or value of JASIF.
1. Return in Investment in the form of capital reduction and dividend payment based on the assumption that JASIF purchases OFCs on Dec. 1, 2014
2. The Thai Government issued the Royal Decree No. 544 dated October 9, 2012 to grant certain tax exemptions to infrastructure funds, subject to the terms and conditions set out in Notification of the Director General of Revenue Department dated March 7, 2013. The Royal Decree grants an exemption from the payment of income taxes to individual unitholders of infrastructure funds (except unitholders who are ordinary partnerships or non-juristic groups of persons) in respect of dividends received from infrastructure funds, including JASIF, for a period of ten years from the registration of such infrastructure funds.