Completing the Deal in Thailand

Thailand has vastly grown over the years, attracting tourists and investment from all over the globe. Dealing with mergers and acquisitions is an important role, for the parties involved, alongside the investment for the respective jurisdiction. This month we speak with Charin Satchayan, who has extensive experience in the M&A field and real estate.

How has the M&A scope changed over the years in Bangkok and what exciting ventures are you looking forward to?

Over the years, we have seen increasing M&A activities expanding into small and medium size enterprises in Thailand. Over the past year, Charin and Associates (C&A) have dealt with a range of deals, such as:

• Acquisition of Leasing and Financing Business by GL - we advised GL on laws and regulations of the Office of the Securities and Exchange Commission and the Stock Exchange of Thailand in connection with assets acquisitions and connected parties’ transactions including process, procedure, relevant documents required, and obtaining the approval from GL’s shareholders relating to the transactions. GL is a public company listed on the Stock Exchange of Thailand.
• Waiver of Tender Offer of Development Bank of Japan - C&A advised Development Bank of Japan (DBJ) in relation to request for the waiver for making a tender offer of all securities in CPR Gomu Industrial Public Company Limited (CPR) (a public company listed on the Stock Exchange of Thailand) from the Office of the Securities and Exchange Commission of Thailand and the Takeover Panel pursuant to the Takeover Rules as a result of a tender offer bid in Japan and the internal corporate restructuring of CPR’s major shareholders in Japan.
• Joint Venture of Innotech Green Energy Company Limited - C&A represented and provided advice to Eiamburapa Co., Ltd. and PTG Green Energy Company Limited (a subsidiary of PTG Energy Public Company Limited) with a registered capital of a Baht 100 million joint venture in connection with the establishment of a new company; namely “Innotech Green Energy Company Limited” to produce bio-ethanol made from cassava pulp in Thailand. We also assisted our clients in preparing and negotiating the Patent License Agreement, Know-How License Agreement and Consulting Agreement with Sapporo Holdings Limited who will be the owner of the licensed patent, inventions and know-how of technology relating to bio-ethanol production from cassava pulp granted by relevant Japan governmental authority. We provided our advice on the legal terms, commercial terms, risks and mitigation of risks that are important for the success of the project.

Do you think foreign corporations that invest into Thailand often have many misconceptions about the best method of successfully developing in a growing city?

I think foreign corporations need to understand the Thai culture a little better when dealing with Thai partners.

You have represented many property and real estate investment trusts (REIT)– which real estate category (from malls, hotels to office buildings etc.) pose the most challenges for corporations? Which category poses the most challenge on your role as a legal expert and why? How do you overcome this challenge?

Last year we have represented several REITs transactions, covering hotel, warehouses, office buildings and retail. The challenges for us as the legal counsel are more related to structure of the transactions, rather than types of assets. For example, the sponsors preferred to inject assets in to the REITs in the form of leasehold right for tax and commercial reasons, rather than freehold. This structure increased the risk of the investors and as a result we need to come up with more complex structures to minimise/mitigate the risks while balancing the interest of the investors and the sponsors. Sometimes, we even had to come up with the so called synthetic sale structure. The other challenge is how to structure the REITs to accommodate the understanding and perception of the authorities.

What do you think is the most important characteristic clients should look for when seeking a legal expert for M&A transactions?

In-depth understanding of the industry which will enable them to give effective and practical advice to the clients, negotiation skills to get the deal done properly and capable and sufficient resources.

Charin & Associates Limited

16th Floor Unit 1609-1610, Park Ventures Ecoplex

57 Wireless Road, Lumpini, Pathumwan

Bangkok 10330 Thailand

www.charinandassociates.com

Charin’s practices focus mainly on capital markets, Public Private Partnerships, project and project finance, financial regulations, mergers and acquisitions and real estate, both in Thailand and the regions (including Laos and Myanmar). He also has expertise in the infrastructure sector (in particular, airport and power project), financial and insurance sector, airport and aviation and also property sector.

Charin & Associates, provides legal services to both Thai and international clients in various areas. In addition, we also advise our clients in transactions in the region, especially in Myanmar.

Our main focus areas of practices are Capital Markets (public offering and private placement of various types of securities), Mergers and Acquisitions, Real Estate Projects, Property Fund for Public Offering (PFPO), Real Estate Investment Trusts (REIT) including Infrastructure Fund.

Our firm also has special knowledge and expertise in certain specific industries, including financial institutions, insurance, energy and power, hotel, aviation and infrastructure.

In addition to Charin Satchayan who have been in legal practices for more than 23 years advising Thai and international clients in various important and landmark transactions in Thailand, our team consists of lawyers who possess law degrees from reputable university overseas and legal knowledge and experiences in representing clients in many important transactions in Thailand.