Thai billionaire secures $10 billion in financing to buy Tesco’s Asia assets

One of Thailand’s richest men, Charoen Sirivadhanabhakdi, has secured nearly $10 billion in financing commitments from various international and domestic banks for a bid for U.K.-based retailer Tesco PLC’s supermarket businesses in Asia, people familiar with the matter said.

Charoen’s TCC Group has submitted a bid for Tesco assets and if his company wins the deal, funding is in place, these people said.

Apart from TCC, Thailand’s two other conglomerates-- CP All PCL and Central Group—have also submitted bids, the people said.

TCC, CP All and Central didn’t reply to mail seeking comment.

Tesco, one of the world’s largest grocers, said in December that it had started reviewing options for its businesses in Thailand and Malaysia, including the possible sale of the assets.

Like some of its counterparts, Tesco has been shrinking its presence abroad to focus on its home market, where it is locked in a price battle with discount grocers and online competitors such as Amazon.com Inc. and Ocado Group PLC.

Since 2011, it has exited markets including Japan, the U.S. and South Korea, and ceded some control of its operations in China.

More than a dozen International and domestic banks from Japan, China, Singapore, Malaysia and Thailand have agreed to offer the financing to TCC, one of the people said without disclosing the names of the banks.

Antitrust issues in Thailand will also be a major factor for the deal to get approved as TCC and CP are leading players in the supermarket business, one of the people said.

A final decision for entering into an exclusive agreement with the selected bidders could be announced as early as this week, one of the people said.

Tesco declined to comment.

Tesco entered Thailand in 1998 by buying a majority stake in the Lotus Supercenter hypermarket for $365 million from Thai conglomerate Charoen Pokphand Group. Tesco Lotus now operates around 2,000 store branches in the Southeast Asian country, including hypermarkets.

People with knowledge of Tesco’s bid to sell its Asia operations had said previously that the Thai segment of the business could be valued at nearly $7 billion, while the Malaysian part could be valued at between $1.5 billion and $2 billion.

The U.K. group has operated in Malaysia since 2006 and now has 74 stores there.

Tesco’s recent divestments are in line with peers such as French players Carrefour SA and Casino Guichard-Perrachon, which have also exited operations in countries such as Indonesia, Thailand and Vietnam in recent years.

TCC Group, a holding company of Mr. Charoen, has business interests in property, retail and consumer sectors. In 2016, TCC acquired Casino’s hypermarkets in Thailand for $3.46 billion.

Source: WSJ