BTS plans Bt130 bn investment spree

The company reported net profit of Bt2.1 billion for the 2016-17 fiscal year, to the end of March. That was followed by net profit of Bt1.06 billion for the first half of fiscal 2017-18, to the end of September, with up to 60 per cent of that coming from infrastructure. Advertising and media accounted for 20 per cent, with the remainder from real estate and services.
“We are confident that infrastructure and tourism will see strong growth, despite the global economic uncertainty. As a result, we have continued to expand our investments for the years 2018-20,” Keeree said at a press conference.
In line with its corporate goals, the group has embarked on restructuring its four businesses groups to achieve a clearer management and business strategy to pursue the investment expansion over the targeted period. BTS Group Holdings will be holding company, with major stakes in each of its subsidiaries. Some business that are still under BTS Group Holdings, such as some real estate projects, will be transfer be to a subsidiary, U City Plc, which will be the group’s property arm.
Keeree said that the group is in the process of transferring Bt12 billion in property assets from a subsidiary Unicorn Enterprises Co Ltd, to U City. The move will clarify the role of U City in management of the property business.
The assets being transferred include those held by a joint venture firm between BTS Group and Sansiri Plc, BTS Sansiri Holdings Co Ltd, U Hotel, Absolution Hotel Service Co Ltd and International School.
U City shareholders will meet on January 4 to decide whether to approve the asset transfer plan. The meeting also will consider a proposal to increase U City’s capital by Bt15 billion in order to enable the transfer of the assets from BTS Group Holdings, Keeree said.
If the plan gains shareholder approval, the asset transfers will be completed in the middle of 2018. U City will then fully become the group’s property arm, focusing on the development of property or the acquisition of property assets that will generate recurring income to the group. Early this year this company bought the assets and management of Vienna House for about 330 million euros (Bt12.3 billion).
The group also is negotiating with two other hotel chains in Europe, for a resort and spa |hotel from one and a hotel in a |central business district from the other. If both deals succeed, the company will spend an invest-ment budget of more than Bt10 |billion, Keeree said.
After the transfer asset, U City Plc will manage four hotel brands - U hotel, Estin, Vienna House and Vienna House Easy – that have 15,000 rooms in service, with 4,000 units under construction and due for completion from 2018-19.
“If we have success with the deals for the two hotels in Europe, that will boost our room numbers from 19,000 to 30,000. We are confident in the outlook for the tourism business to see continued growth both in Thailand and overseas,” Keeree said.
BTS Group Holdings chief executive officer Kavin Kanjanapas said Vienna House has the potential for expanded investment to take the chain to Thailand and elsewhere in the Asia market. The U Hotel and Estin brands also have the potential for expanded investment in Europe when the group completes its restructuring in the first half of next year.
The group’s infrastructure business will see investments made by both of its subsidiaries in this sector, Bangkok Mass Transit System Plc, which operates BTS skytrain service; and its joint venture firm with Ratchaburi Electricity Generation Holdings Plc and Sino-Thai Engineering Plc, the BSR Joint Venture firm.
“We are interest in expanding our investment in infrastructure projects, both at home and overseas, especially in Asean countries, which are increasing their investment in infrastructure projects. From 2018- 20 we are investing to develop two monorail routes – the Yellow Line from Lad Prao to Samrong worth Bt51.93 billion and the Pink Line from Kae Rai to Min Buri, with investment of Bt53.5 billion. Combined, the investment is Bt105.45 billion,” Keeree said.
The group also is interested in joining the bidding to develop new infrastructure projects worth Bt300 billion that are awaiting the government’s announcement of the terms of reference in 2018, he said.
The group’s advertising and media business is managed by VGI Global Media Plc, which has announced that it will boost investments in Thailand and overseas, particularly in Asean countries.
For the services business, the company has set up a joint venture firm, Man Food Holdings, with Bangkok Ranch Plc to operate restaurants. Expansion is also likely in other food businesses.