What is JASIF
Jasmine Broadband Internet Infrastructure Fund
Optical Fiber Cable (OFC): Infrastructure for Telecommunication System
Jasmine Broadband Internet Infrastructure Fund ("JASIF") will invest in OFCs developed and managed by Triple T Broadband PLC ("TTTBB"), a subsidiary company of Jasmine International PLC ("JAS").
The OFC network is an important part of the telecommunication network, which is capable of delivering triple-play services on demand (i.e., the provision of broadband Internet, VoIP and IPTV over a single broadband connection) and plays an important role in the economic and social development of Thailand.
The connection between JASIF and JAS
JAS is the Sponsor of JASIF and a major shareholder of TTTBB, the owner of the OFCs that will be transferred to JASIF. JAS will subscribe and 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 year four to six.
The Initial InvestmentThe initial assets purchased by the Fund comprise OFCs totaling approximately 980,000 core kilometers consisting of:
- Not less than 800,000 core kilometers of OFCs that TTTBB will deliver and transfer to JASIF on the closing date; and
- Approximately 180,000 core kilometers of OFCs that TTTBB will deliver and transfer to JASIF within 2 years after the closing date.
After JASIF has purchased OFCs from TTTBB on the closing date, it will subsequently lease back the OFCs to TTTBB and/or other third party lessees, as applicable, by entering into two agreements with TTTBB as follows:
- Main Lease Agreement for the lease of 80% of total OFCs for a lease period of approximately 11 years (expiring on February 22, 2026 in line with the termination of TTTBB's Type 3 license); and
- The Rental Assurance Agreement provides the Fund with an opportunity to lease the Secondary OFCs to third party lessees, either in whole or in part, which is in line with the National Broadcasting and Telecommunications Commission's policy to promote the shared use of the telecommunications infrastructure. During the period in which no third party is leasing the Secondary OFCs directly from the Fund, TTTBB agrees to lease such Secondary OFCs and make the lease payments due under the Rental Assurance Agreement for such Secondary OFCs. The remaining 20% of the Existing OFCs and 20% of the Future OFCs will be leased by TTTBB or any third party lessee under the Rental Assurance Agreement. The initial term of the Rental Assurance Agreement is three years, which is renewable at the Fund's option for additional three-year periods until the expiry of the Main Lease Agreement.
|Length of Leased OFCs||Lease Period||Rental Rate|
|Main Lease Agreement||
80% of the OFCs, totaling approximately 784,000 core kilometers, including:
|Approximately 11 years, ending February 22, 2026||THB 425 per core kilometer per month until December 31, 2015 and will be increased each year in line with the change in Thailand CPI announced by the Ministry of Commerce with a cap of 3%|
|Rental Assurance Agreement||20% of the OFCs, totaling approximately 196,000 core kilometers, including:
||Three years, renewable at JASIF's option for additional three-year periods until the expiration of the Main Lease Agreement||THB 750 per core kilometer per month until December 31, 2015 and will be increased each year in line with the change in Thailand CPI announced by the Ministry of Commerce with a cap of 3%|
- Under the Rental Assurance Agreement, whereby JASIF designates TTTBB to enter into a lease agreement with a third party lessee in accordance with the terms specified by the fund, JASIF may receive additional revenue if the aggregate rent TTTBB receives from other lessees is higher than the sum of the total rent that TTTBB must pay to JASIF over the 3 years of the marketing period. JASIF will be entitled to 75% of such additional rent while the balance will be paid to TTTBB as compensation for providing marketing services.