Thailand's King Power wins duty-free retailer auction for major airports

Lotte

19/06/2019 10:28

By Chayut Setboonsarng
    BANGKOK, June 19 (Reuters) - Airports of Thailand Pcl (AOT)
 AOT.BK  on Wednesday approved King Power Group's $494 million
bids for duty-free retailing at its major airports over rival
contenders, including a group of South Korea's Lotte  004990.KS 
and Bangkok Airways Pcl  BA.BK .
    The hotly-contested auction had lured international bidders
seeking to benefit from Thailand's booming duty-free industry on
growing tourist numbers, and powered airport operator AOT's
revenue growth.    
    Tourist receipts account for about 12% of the second-largest
economy in Southeast Asia, making it one of the most important
drivers of growth, and in 2018, the country saw more than 38
million visitor arrivals, according to Thai government data.
    Unlisted King Power Duty Free  KPDUT.UL  won two duty-free
concession contracts and retail concessions at four major Thai
airports, including the country's main international airport
Suvarnabhumi, AOT said in a statement. 
    Its winning bids came less than a year after its founder
Vichai Srivaddhanaprabha died in a helicopter crash in a
helicopter crash outside the stadium of the Leicester City
Football Club, that he owned. His death led to analysts
questioning the future of King Power's franchise.  urn:newsml:reuters.com:*:nL3N1X91Y5
    King Power, which retains ownership of Leicester City club, 
offered 15.42 billion baht ($494 million) in yearly minimum
guarantee of revenue without tax, topping the Lotte and Bangkok
Airways consortium's 8.52 billion baht bid, AOT said.
    Another group - the Royal Orchid Hotel Pcl  ROH.BK  and WDFG
UK, a unit from travel retailer Dufry  DUFN.S  -- made an offer
for 7.26 billion baht.
    For a separate concession contract for three major regional
international airports in Hat Yai, Phuket, and Chiang Mai, King
Power also outbit its rivals by offering 2.33 billion baht.
    It also won a licence to operate commercial services such as
restaurants and shops at all four airports, beating local retail
giant Central Pattana  CPN.BK  with an offer for a yearly
minimum revenue of 5.8 billion baht.
    King Power's current duty-free concession at Suvarnabhumi
airport is set to expire in 2020, and the new concession will
expire in March 2031.
    AOT, Thailand's second biggest company by market value,
reported a 13% rise in concession revenue to 16.7 billion baht
in the last fiscal year.
    
($1 = 31.2400 baht)

 (Additional reporting by Panarat Thepgumpanat and Panu
Wongcha-um; Editing by Rashmi Aich)
 ((chayut.setboonsarng@tr.com; +66854849033; Reuters Messaging:
chayut.setboonsarng.thomsonreuters.com@reuters.net))