King Power's debt repayment negotiations with AOT allegedly at a standstill, according to unconfirmed reports, are denounced as unfounded by AOT.
Airports of Thailand (AOT) Clears Rumors on King Power Duty Free Debt Agreement
The recent whispers surrounding AOT's dealings with King Power Duty Free (KPD) over debt repayment have been quickly squashed by AOT. Contrary to reports, AOT insists it's spot on with its agreement terms.
The chatter started after KPD was granted participation in a scheme that extended payment periods for commercial operators and airlines facing financial difficulties at six airports managed by AOT.
The market reacted swiftly, with AOT's share price taking a tumble, dropping by 1 baht to 30.25 baht per share, marking a 3.20% nose dive from its low of 30 baht.
Paweena Jariyathitipong, AOT's acting president, spoke to PostToday on Friday to clarify, claiming the rumors were a simple misunderstanding. According to Paweena, none of KPD's requests, such as waiving the Minimum Guarantee or cutting Revenue Sharing to 20%, have been accepted unconditionally.
At present, KPD is making the usual payments, with the ongoing invoices and a 23% Revenue Sharing payment. Any delayed payments will attract interest charges.
Addressing the controversy, Paweena was adamant, "King Power issues invoices and has paid approximately 50% of the amounts, with the rest subject to interest for late payment."
Regarding the Revenue Sharing issue, Paweena emphasized that AOT had rejected KPD's proposition to pay 20%. Following negotiations, they agreed on a 23% payment, added on top of the existing payments.
Currently, AOT is in negotiations with top Thai universities to find solutions for duty-free operations at its airports. These discussions are part of ongoing procurement processes, with the results expected to be clearer by next week.
AOT's recent agreement with KPD follows negotiations that have been likened to a boxing match, with AOT winning all points. According to Paweena, "AOT is not allowing a delay in payment; it is simply following the standard procedures. If you pay late, you pay a fine. If you want to extend the payment period, it's entirely normal, and anyone can request it."
TAGS* AOT* King Power* Debt Repayment* agreement* Duty free* airports
Insights:The current debt repayment agreement between AOT and KPD is an extended installment payment plan with deferred minimum guarantee payments, backed by bank guarantees that ensure AOT's financial exposure is limited, despite the significant revenue impact. The negotiations reflect ongoing discussions as KPD grapples with liquidity issues and a challenging market environment.
- The recent speculations over King Power Duty Free's debt repayment to Airports of Thailand (AOT) have been addressed, with AOT stating that the agreement terms are being adhered to.
- Paweena Jariyathitipong, AOT's acting president, clarified that none of King Power's requests, such as waiving the Minimum Guarantee or cutting Revenue Sharing to 20%, have been accepted unconditionally.
- Currently, King Power is honoring its usual payment obligations, making payments as they come due and abiding by the 23% Revenue Sharing agreement.
- In a bid to improve duty-free operations at its airports, AOT is currently in talks with top Thai universities for potential solutions, a part of ongoing procurement processes.
