Gulf Development Public Company Limited (SET: GULF) sought to correct the record on the Thaicom 4 and Thaicom 6 satellite concession dispute at an analyst meeting held this morning, following news reports that the Cabinet had approved legal action against Thaicom Public Company Limited (SET: THCOM) and GULF seeking roughly THB 1.26 billion in penalties and damages.
Sarath Ratanavadi, CEO of GULG, representing the company at the meeting, told analysts that the report was misleading. He clarified that GULF itself was never involved in the operation of the satellites and has no direct connection to the underlying dispute. The company’s exposure, he said, stems solely from its amalgamation with INTUCH, through which it inherited the matter as a contingent liability. He emphasized that this is not a dispute between GULF and the government.
According to Sarath, the concessions for Thaicom 4 and Thaicom 6 have expired, but the underlying agreements contain a clause allowing the state to reclaim any assets or equipment that were not fully returned upon expiry. Under the concession terms, Thaicom is responsible for returning the relevant equipment to the Ministry of Digital Economy and Society (DE).
GULF stated that Thaicom has already returned all required equipment and has received a confirmation letter from the ministry acknowledging this. The 300 million baht in asset value could be some leftover equipment that could be returned without issues.
Sarath disputed the widely reported THB 1.2 billion figure, breaking down the claim as follows:
- Approximately THB 300 million relates to the value of items the company acknowledges may need to be returned or compensated for.
- The remaining roughly THB 800-900 million represents interest and opportunity-cost charges claimed by the government, the methodology for which GULF said it does not know and does not agree relates to the actual return of equipment.
GULF clarified that the process moving forward is arbitration to mediate the dispute, not a court lawsuit. The reason the matter required Cabinet approval, the company explained, is that the case would reach its five-year limitation period soon, after which the state’s ability to pursue the claim would lapse. The Cabinet’s approval was therefore procedurally necessary to allow the government to request arbitration before that deadline.
Q&A Highlights
During the question-and-answer session, GULF addressed several points raised by analysts:
- USO3 auction unaffected — Management confirmed the dispute has no impact on the company’s participation in the USO3 auction process.
- No provisioning planned — GULF said it does not need to set aside a provision for the roughly THB 300 million it may need to return to the state, noting the matter can simply be settled by returning the relevant amount. It also does not plan to provision for the additional THB 800–900 million in claimed interest and opportunity costs, saying this portion is unrelated to the actual equipment return and that the calculation method behind it is unclear to the company.
- Liability rests with Thaicom — Management reiterated that any liability from the dispute sits with Thaicom, not with GULF.
- No expectation of further damages — GULF said it does not anticipate additional damages beyond what has already been disclosed, and expects the amount to stay flat or decrease rather than increase. The company said it will wait for the arbitration process to render a decision.
- Expected to be resolved without major difficulty — Management said it believes the amount involved is not large and that the matter can likely be resolved without significant complication.
- Not a GULF matter — Management reiterated that the dispute is unrelated to GULF and originates from an arrangement made between Thaicom’s former shareholders and the government prior to GULF’s involvement.
