The outlook for Thai small businesses this year was not prosperous, as the economy continued to grow at a sluggish pace.Some large companies outperformed others, but often they were forced to adjust their structures and increase liquidity through major transactions.Notable deals included the separation of the food and real estate businesses within the Sirivadhanabhakdi family, as well as the year-end investment by CP Axtra, under Charoen Pokphand (CP) group, in the Happitat mall at Forestias, also under the CP umbrella.Several other corporations wrapped up deals in a bid to strengthen their position.
Sirivish Toomgum and Yuthana Praiwan
In July 2024, Gulf Energy Development Plc (GULF) and Intouch Holdings Plc (INTUCH) announced a strategic amalgamation to restructure related companies within the group.
The Gulf PD power plant in Rayong.
The amalgamation brings together Gulf’s established leadership in the energy sector with Intouch, the parent of major telecom operator Advanced Info Service (AIS).
According to Gulf’s filing to the Stock Exchange of Thailand for its third-quarter financial performance, the entire amalgamation process is expected to be completed in the second quarter of 2025.
Their combination aims at simplifying the shareholding structure, strengthening the group’s financial status, and balancing the investment portfolio.
It also aims to cultivate new growth opportunities in the energy and infrastructure and digital landscape.
As of August 2024, Gulf held 41.73% of the shares in InTouch, which in turn owned 40.44% of AIS.
Gulf and InTouch have agreed to enter into the amalgamation and the formation of a newly listed public limited company. They also agreed on the conditional voluntary tender offer of AIS and Thaicom.
Shareholders of Gulf approved the planned merger in October, allowing the transaction to be completed.
A combination of the companies will accelerate business and earnings growth at the newly created entity, Gulf founder and chief executive Sarath Ratanavadi said at a shareholders’ meeting in Bangkok, according to Bloomberg.
Yupapin Wangviwat, chief financial officer at Gulf, said earlier that the new company to be formed under the amalgamation will balance the investment and revenue structure portfolio in terms of income stream and net profit.
Before the amalgamation, 70% of Gulf’s net profit was from energy and infrastructure sectors, while the rest was from InTouch. Once the merger is completed, the structure will be 60% and 40%, respectively.
Investor group sees potential in company’s food delivery service
The on-demand food delivery sector should see healthy competition as the Robinhood app remains in the market, according to industry observers.
A Robinhood delivery driver in Bangkok.
In October 2024, Thai financial tech group SCB X Plc signed a deal to sell all shares of Purple Ventures Co Ltd, the provider of the Robinhood app, to a group of investors led by the Yip In Tsoi Group.
The total value of the transaction was up to 2 billion baht, consisting of an initial payment of 400 million baht and an additional performance-based payment of up to 1.6 billion baht.
The investor group in the deal comprises Yip In Tsoi Group, the Brooker Group Plc, SCT Rental Car Co Ltd and Loxbit Plc.
The Yip In Tsoi Group has nine subsidiaries with businesses ranging from digital solutions, engineering and trading to manufacturing and insurance.
Morakot Yip In Tsoi, chief executive of Yip In Tsoi Co Ltd, said the investor group sees the potential in Robinhood’s food delivery service.
E-commerce guru Pawoot Pongvitayapanu said earlier the new investors are unlikely to make Robinhood a game changer in the market, with the focus expected to be on small merchants.
Thanawat Malabuppha, honorary chairman of the Thai E-commerce Association, said he does not anticipate a more intense price war in the online food delivery business following the acquisition of the Robinhood app.
The new investors will benefit from access to the seller database and millions of users, said Mr Thanawat.
SCB X previously planned to cease operations of the Robinhood app in July, but later postponed the plan based on its ongoing consideration of acquisition proposals for the entire business from interested parties.
The firm already closed other services on the app in July as originally planned.
Recently Robinhood partnered with PayPoint to allow PayPoint partners to redeem points for discounts on food ordering services with Robinhood, expected to start in 2025.
PayPoint is a platform for collecting and exchanging points for paying for products and services of partner agent stores both domestically and internationally.
Somruedi Banchongduang
SCB X, the financial technology conglomerate and holding company of Siam Commercial Bank (SCB), announced on Feb 28, 2023 it entered into a sales and purchase agreement via SCB to acquire the entire charter capital of Home Credit Vietnam Finance Co, the consumer finance arm of Home Credit NV (Home Credit Group) for around 31 billion baht.
The strategic move strengthens the group’s presence in the highgrowth Southeast Asian market, while increasing shareholder value and delivering long-term returns, said Mr Arthid.
The deal is expected to close by the first half of 2025, pending approval from relevant authorities.
Founded in 2008, Home Credit Vietnam has become a leading player in Vietnam’s consumer finance sector. It offers a range of financial products, including consumer durable loans, revolving loans, cash loans and two-wheeler loans, targeting the mass and upper-mass market segments.
Since its inception, the company has served over 15 million customers and established a robust presence across Vietnam, operating 14,000 point-of-sale locations.
In 2022, Home Credit Vietnam reported net profits equivalent to around 1.9 billion baht based on its audited financial statements.
Over the past decade, it has achieved a compound annual growth rate of 18.7% in total assets, showcasing the efficiency and potential of its operations.
The company boasts an extensive omnichannel distribution network that seamlessly integrates online and offline channels to enhance the customer experience.
It also maintains a strong risk management framework, efficient collection capabilities and advanced digital infrastructure.
As of June 30, 2023, Home Credit Vietnam held a 14% market share in Vietnam’s consumer finance market, making it the second-largest player in the sector.
Vietnam’s consumer finance market, one of the fastest-growing in Southeast Asia, benefits from strong macroeconomic fundamentals, growth-oriented policies, favourable demographics and an expanding middle class.
Arthid Nanthawithaya, chief executive of SCB X, said the acquisition marks a significant milestone in SCB X’s journey to becoming a leading regional financial tech group.
The strategic move strengthens the group’s presence in a high-growth Southeast Asian market, while increasing shareholder value and delivering long-term returns, he said.
“Vietnam, with its dynamic economy averaging 7.5% GDP growth over the past decade and its tech-savvy population, is a key strategic market for SCB X. This acquisition signals the beginning of our expansion into a country with more than 100 million people,” said Mr Arthid.
“Home Credit Vietnam’s strong customer base of 15 million, extensive network of 14,000 point-of-sale locations and experienced management team — comprising both European and Vietnamese members — will serve as a solid foundation for SCB X Group’s presence in Vietnam.”
Home Credit Vietnam will serve as a vital foundation for the SCB X Group’s presence in Vietnam, contributing to the group’s bottom line immediately upon the deal’s completion, he said.
The acquisition enhances the group’s income diversification for long-term stability, while ensuring that both SCB X and the bank maintain strong capital adequacy ratios post-transaction, said Mr Arthid.
HOSPITALITY
Narumon Kasemsuk
Though the tourism sector may fall short of the government’s target for arrivals this year, despite recording more than 33 million arrivals in the first 11 months, the hospitality sector’s performance has been ignited countrywide, especially in the gateway city of Bangkok.
Hyatt Regency Bangkok Sukhumvit is conveniently located on Sukhumvit Soi 13.
In November, a major hotel sale took place when Hyatt Regency Bangkok Sukhumvit was sold by SET-listed Grande Asset Hotels and Property to Grand Residence International for 5.05 billon baht.
According to Jones Lang LaSalle (JLL), this was Thailand’s largest single asset hotel transaction on record. The deal was a rarity in Bangkok’s tightly-held grade-A hospitality market, noted the consultancy.
Properties in such prime central business district locations are highly sought after as they attract significant interest from long-term and strategic investors, said JLL.
According to Grande Asset, it sold key assets used in the operations of the 31-storey Hyatt hotel and The Allez Mall, which included three plots of land located on Sukhumvit Soi 13.
The land assets sold cover roughly three rai, while the sale included all buildings constructed on the property, as well as all movable assets currently used in the day-to-day operations of the hotel and mall.
The sale generated cash for repayment of outstanding loans and reduced the burden from interest expenses, as well as providing funds for investment and the development of current and new projects that align with Grande Asset’s business plan.
SET-listed developer Property Perfect, the parent company of Grande Asset, said revenue from the hotel business rose in the third quarter, unlike its residential development businesses.
Grande Asset is also planning to sell the Royal Orchid Sheraton Hotel, its five-star property located by the Chao Phraya River, for 6 billion baht in 2025 in order to strengthen its financial position.
Kanana Katharangsiporn
After buying shares in the US-based lifestyle hotel chain Standard International in 2017 and becoming the major shareholder, SET-listed developer Sansiri announced it would sell its entire stake in the business to the US-based Hyatt Group for US$355 million.
Sansiri will continue to own four properties now managed or franchised under the Hyatt brand, namely The Standard, Hua Hin; The Standard Residences, Hua Hin (pictured); The Peri Hotel, Hua Hin; and The Peri Hotel, Khao Yai.
According to Uthai Uthaisangsuk, president of Sansiri, the transaction was meant to drive net profit to a new high for a third consecutive year.
Sansiri bought a 35% stake in Standard in 2017, and has since increased that to 71%, which will be fully sold to Hyatt.
Sansiri will continue to own four properties now managed or franchised under the Hyatt brand, he said. These comprise The Standard, Hua Hin; The Standard Residences, Hua Hin; The Peri Hotel, Hua Hin; and The Peri Hotel, Khao Yai.
The Manner, a new luxury brand debuting in SoHo, New York City, is slated to open in March 2025.
Mr Uthai said some of the profit gained from this deal will help reduce Sansiri’s debt burden and improve cash flow, including reducing the gearing ratio from 1.62 to 1.5 by the end of the year, while the remainder will be used for other investments.
Since 2017, the company saw the investment in Standard International as a new strategy with the potential to grow as a large brand, he said.
He said 30 hotels in the portfolio should be enough to break even for hotel investment.
Mr Uthai said Hyatt contacted Sansiri at the right time, when Standard had 21 hotels with roughly 2,000 rooms in its portfolio, including in New York and Miami.
The existing properties have been immediately added to Hyatt’s portfolio, along with future contracts that will be made with Standard.
Mr Uthai said the group does not have a plan to invest in new hotels, but will instead focus on its core business of residential development.
If there is an opportunity to invest in new hotels, the projects should support Sansiri’s residential properties in each location, he said.
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