Bts Skytrain Carve-Out: the Return of the Infrastructure Trust Fund

INS951

BTS Skytrain Carve-out:

The Return of the Infrastructure

Trust Fund

06/2015-6062

This case study was written by Pierre Hillion, Professor of Finance, the de Picciotto Chaired Professor of Alternative

Investments at INSEAD, Bowen White, Research Associate, and Jean Wee, Research Associate. It is intended to be

used as a basis for class discussion rather than to illustrate either effective or ineffective handling of the specific

investment situation.

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Introduction – A Long-Awaited IPO

On 29 March 2013, after a delay of more than a decade, the Core BTS Skytrain (Core

Skytrain) elevated railway concession in Bangkok (Thailand) finally launched an initial

public offering (IPO) of a sort. Originally scheduled for early 1997, the IPO had been

postponed by a series of unfavourable circumstances.

When BBL Asset Management Company Limited embarked on the book-build process for the

IPO, however, it was in a form quite different from the expected sale of public shares in

Bangkok Mass Transit System Public Co. Ltd. (BTSC), the company with the concession to

operate and maintain the Core Skytrain. Instead, what was offered were the rights to the net

farebox revenue generated from Core Skytrain via an offering of investment units in

Thailand’s first publicly listed infrastructure mutual fund: the BTS Rail Mass Transit Growth

Infrastructure Fund (BTSGIF). Proceeds from the IPO...