Thai govt raises fine on ITV to $4.3 billion

The Straits Times, January 24, 2007


BANGKOK - A Thai government agency said on Wednesday it has the raised fine imposed on broadcaster ITV PCL for breach of contract to 100 billion baht (S$4.3 billion), but would extend the deadline for the first payment.

ITV, owned indirectly by Singapore state investment firm Temasek Holdings, was due to pay 2.21 billion baht to the Prime Minister's Office (PMO) on Jan 29., senior official Jullayuth Hiranyawasit told reporters.

'As of Dec 15, the fine and concession fees plus interest ITV has to pay to PMO has increased to about 100 billion baht,' he said. 'PMO will extend deadline for ITV for some time.'

ITV has submited five proposals, including an offer to sell all the firm's shares to the government, which would be put to the Cabinet, Mr Jullayuth said, without saying when the Cabinet would consider the issue.

The other proposals included issuing new shares to the PMO, bringing in a new investor to buy out major shareholder Shin Corp, which Temsasek bought last year, paying the fine in installments and terminating the contract.

Earlier this week, ITV said it had agreed to pay 2.21 billion baht and was considering several options to raise funds after it failed to get loans or raise capital through a rights issue due to the uncertainty about the amount of the fine.

ITV, which runs Thailand's third most popular television channel, said it was still negotiating the final size of the fine with the PMO, the department which owns the concession licensed to the broadcaster.

In December, ITV lost its final appeal in the licence fee dispute with the PMO, which imposed a 97.7 billion baht fine for breach of its licence fee agreement.

ITV had appealed after a lower court ruled in May 2006 in favour of the PMO, which had sued the broadcaster to overrule an arbitration ruling which cut the company's fee payments to 6.5 per cent of revenues from 44 per cent in the original contract. -- REUTERS