Vichai eyeing China’s travel, sport markets

Vichai Srivaddhanaprabha, founder and chief executive of the duty free shops, said King Power and Thai AirAsia would begin to synergise many business and marketing platforms to strengthen future growth following the Bt7.9 billion deal.

Thai AirAsia would continue to expand its network while King Power will push more duty-free goods onboard, as well as via the Internet.

King Power aims to become “one-stop service” centre for shopping, travelling, and entertaining with sport events thanks to Leicester, its premiership winning football club in Britain.
The group will soon to launch a new online shopping, duty-free promotion, and join a marketing campaign with the new partners. Even people who not travel will be able to buy duty free items, it has said.

Thai AirAsia (TAA) is the airline that carries the most passengers between Thailand and China, so it is not difficult to see how an alliance with TAA will promote King Power’s retail business in the Chinese market.
TAA and King Power will team up to develop their brands, products and services together, with the aim of providing customers with international quality shopping and travel experiences at affordable prices.
Vichai said yesterday he had been interested in the airline business for a long time and used to have a 5-per-cent share in Nok Air, but decided to sell it because it was “too small”.
With 27 years of expertise in retail and duty-free shops, the King Power boss believes he can expand and diversify into new opportunities such as travel and sport.
The deal between King Power and AAV is expected to help strengthen both companies and help them grow, particularly in China, where he sees high potential right the moment.
“China is an opportunity for us. It is emerging for both air travel and also for duty free products,” he explained.
King Power currently operates a huge duty-free shop at Suvarnabhumi international airport, although its concession will expire in five years.
The billionaire whose net worth is estimated by Forbes magazine at about US$3.1 billion (Bt109 billion) also bought Leicester City Football Club in 2010. Leicester became the toast of Thailand when it won the UK Premier League recently.
In the airline deal, Vichai and four of his family bought control of AAV, operator of Thai Air Asia, the country’s largest budget airline, from the carrier’s chief executive Tassapon Bijleveld and two of his family.
AAV reported to the Stock Exchange of Thailand yesterday that its board of directors had approved the sale of 1.8915 billion shares of the firm at Bt4.2 each to Vichai and his family members.
AAV’s share price closed at Bt6 yesterday, up 10 satang or 1.69 per cent.
After the transaction was completed yesterday through big lot purchases, Tassapon reduced his shareholding in AAV from 13 per cent to 5 per cent, while his two family mem?bers’ shares dropped from a combined 31 per cent stake to zero.
Vichai now has a 14-per-cent share and his four family members take up the balance of 25.82 per cent.
Tony Fernandes, AirAsia Group CEO said yesterday:“This investment proves that Thai AirAsia’s value proposition remains undiminished. The vote of confidence that comes from one of the most successful family businesses is fantastic. The potential tie-ups between AirAsia and King Power, Thailand’s sole duty-free operator, are massive and we look forward to working together, not only in Thailand but across the group and Asean.”
Fernandes said there was no change to management at the Thai unit as Tassapon Bijleveld would continue as CEO as long he is still a substantial shareholder.
Earlier this year, King Power revealed plans to open duty free shops in China, Japan, Vietnam and Myanmar, from existing shops in Bangkok, Phuket, Samut Prakan, and at Suvarnabhumi and Don Mueang International Airport.
The group expected to earn Bt85 billion revenue this year, up from Bt65 from last year.
Vichai will have to proceed with a mandatory tender offer to acquire all the remaining securities of AAV from its other shareholders in accordance with stock market regulations. AAV’s board also approved the appointment of three new directors effective immediately, namely Sombat Dechapanichkul, Aiyawatt Srivaddhanaprabha and Apichet Srivaddhanaprabha. They replace Pattra Boosarawongse, Tanapat Ngamplang and Prechaya Rasametanin.