DTAC Slumps after Proposing ฿9.5bln. Compensation to Settle Disputes with CAT

To settle disputes with CAT Telecom, DTAC will pay ฿9.5 billion compensation after the proposal has been approved at the Annual General Meeting of Shareholders.

Total Access Communication Public Company Limited (DTAC) has settled numbers of a dispute between CAT Telecom Public Company Limited (CAT) by signing an agreement to pay a total of ฿9.5 billion compensation to CAT, separating into two transactions. The amount of ฿6.8 billion will be transferred as an initial payment, while the remaining ฿2.67 billion will be paid once the relevant court cases are withdrawn from the court in accordance with the Disputes Settlement Agreement.

However, DTAC will present the details of the Disputes Settlement Agreement for approval by its shareholders at the Annual General Meeting of Shareholders (2019), which will be held in due course.

This settlement reflects a short-term negative sentiment to DTAC as the company has to record ฿8.1 billion on its 4Q18 financial statement while the remaining ฿1.4 billion was already reserved beforehand for this dispute. Analysts estimate a deficit of ฿7 billion in DTAC’s 4Q18 financial statement.

DTAC currently has ฿27 billion of cash which is still manageable, the outflow will have an effect on its base value approximately ฿4 using the DCF method.

DTAC closed at ฿42.00/share, plunged ฿4.25 or 9.19% with ฿1.27 billion in value. The lowest of the day was ฿38.25/share and the highest of the day was ฿47.00/share.