Dusit Thani’s shareholders have approved a major property management project to have three of its luxury hotels, including Dusit Thani Laguna Phuket, Dusit Thani Hua Hin and dusitD2 chiang mai having an aggregate value of over THB four billion, put under the umbrella of a property fund, as well as to invest in up to one-third of the fund’s investment units and manage the three hotels.
Mr. Chanin Donavanik, Chief Executive Officer of Dusit Thani PCL revealed the Company’s shareholders have resolved to approve its plan to acquire the business of Dusit Thai Laguna Phuket from Laguna Resorts & Hotels PCL at a total value of around THB 2.716 billion.
The decision to acquire the hotel was made because the Company foresees the potential in the business operation of the Dusit Thani Laguna Phuket and it will also sustain the hotel brand network of the Company in Phuket, a province with high potential in tourism business. Besides, the Company has been hired to provide hotel management service in relation to Dusit Thani Laguna Phuket for 23 years and has conducted sales and marketing strategy for the resort which results in its global recognition and satisfactory operating results. This will allow the Company to take over and continue the hotel’s operation effectively without interruption.
Mr. Donavanik noted the Company is going to transfer 34-rai land as well as 12 buildings, hotel utilities of Dusit Thani Laguna Phuket to the property fund to be established, in the price range of THB 2.700 billion – THB 2.750 billion.
In addition, to attract investors’ interest in the fund, Dusit Thai Properties PCL, a subsidiary of the Company, will dispose of the assets used in the operation of dusitD2 chiang mai, which include three-rai land, three buildings and hotel utilities, to the property fund in the price range of THB 350 million – THB 400 million. The subsidiary will also lease out the assets used in the operation of Dusit Thani Hua Hin, including 63-rai land, six buildings and hotel utilities, to the fund for a 30-year term to the property fund, altogether having a total value of THB 850 million – THB 950 million.
“After the Securities and Exchange Commission (SEC) Office approves the establishment of the property fund, Dusit will invest by holding up to one-third of issued and distributed investment units in the fund, with the value in the range of THB 1.300 billion – THB 1.370 billion,” said Dusit CEO. He added the Company will set up an at least 99.99%-held subsidiary to serve as a special purpose vehicle (“SPV”) to support the management of the fund’s assets by leasing and/or subleasing the assets (as the case may be) from the fund and, as the lessee and hotel operator, to engage the Company to provide management services to ensure the hotel assets achieve the desired rates of returns.
“Putting the three hotels in the same property fund will make the fund large enough to attract investors from all segments and will allow more liquidity. In addition, the fact that these hotels are located in three different provinces known as Thailand’s most attractive travel destinations will help reduce future external risks. The fund will also provide the Company with added flexibility in terms of business expansion by way of investing in other assets in the best interest of the Company’s shareholders. The Company will hold one-third of investment units in the fund, which will be managed by Krung Thai Asset Management PLC (KTAM) and will become the provider of asset management services. All these factors contribute to the sustainable positive outlook of these three high-potential hotels.
Dusit has designated Kim Eng Securities (Thailand) PLC and CIMB Securities (Thailand) Ltd. as its financial advisor in relation to the fund,” he said.