BTS chief returns witH big real-estate venture

The BTS SkyTrain will continue to be Keeree Kanjanapas’ cash cow, while the property business, especially in hospitality, will be part of a new strategy to generate rental income for his group.

Keeree Kanjanapas, who owns property company Tanayong and the Bangkok Mass Transit System (BTS), has come back to expand his business by focusing on the hospitality industry and the BTS SkyTrain. He had faced a debt burden of up to Bt77 billion arising from the financial crisis of 1997.

In the the hospitality industry, Tanayong will work as Keeree's business arm. He plans to invest about Bt23 billion to build 16 hotel and resorts across Thailand and overseas territories, starting this year until 2013.

Tanayong will set up a joint venture with Minor Group's management - Jonathan Wigley, John Westoby, Thitiya Westoby and Nopparat P'Kulsiri - who call themselves Absolute Hotel Services and have a registered capital of Bt25 million. The company will provide property-management and other consultancy services to other companies in the hospitality and property industries.

Tanayong will hold a 50-per-cent stake in the joint venture.

Meanwhile, Keeree believes he will succeed in buying back the stake in BTS from creditors after BTS's debt-rehabilitation plan for Bt77 billion was completed in April.

BTS now earns an average daily revenue of Bt6 million, with 450,000 passengers using the service a day, lower than the original estimate of 600,000 a day.

The company's revenue for fiscal 2008 (April 2007 to March 2008) has recorded a growth of only 4 per cent compared to the last fiscal.

However, the company believes revenue will increase 7 per cent this year as raised fuel prices encourage commuters to use the SkyTrain rather than their cars.

Keeree had suspended his investment after he faced a debt burden of up to Bt77 billion in 1997.

Keeree took more than 11 years to rehabilitate his debt in BTS, while, his property business had to suspend a new project launch after Tanayong recorded a loss.

However, Keeree has now succeeded in restructuring his debt with his creditors. BTS and Tanayong also have two new strategic partners - Dubai Investment Group and Hong Kong-based New World Development. As a result, Keeree believes his businesses, especially Tanayong, will recover this year after suspended investments for 11 years.

Tanayong managing director Kavin Kanjanapas, who is Keeree's son, has started giving interviews to the media and has issued a press release announcing investments worth Bt23 billion from this year until 2013.

"We want to develop property projects that provide rental and service income to our business and will balance our portfolio between sales and rental income. The hospitality business, especially hotels and resorts, will help balance our portfolio in the long term," he said, while talking to a Thai newspaper last week.

Kavin said the mission is to increase the portfolio to 16 hotels and resorts - within Thailand, focusing on Chiang Mai, Koh Samui, Chiang Rai, Kanchanaburi, Phuket, Krabi, Khao Yai, Rayong and Bangkok, and three locations outside Thailand, Luang Prabang in Laos and Phnom Penh and Siem Reap in Cambodia - in five years.

The company that will take care of this business, U Hotels and Resorts, will have a maximum 100 rooms at each property and will include a residential element in some cases. The first property that is part of the plan is U Hotel in Chiang Mai, which had its grand opening last month. The company will introduce the hotel to the media this weekend.

The company will also launch new residential projects in the second half of the year and next year.

"We believe that our business is now strong enough for us to be able to expand our investment," Keeree said.

"We have no plans to sell our stake to the government. We also have the right to buy the stake back from our creditors following the rehabilitation plan," Keeree said in March, before his debt-rehabilitation plan was completed.

In the first quarter, BTS signed a US$70-million (Bt2.28 billion) contract for 12 four-carriage trains with Changchun Railway Vehicles and Citic International of China, and Mitsui (Thailand). The trains will be delivered next year. This is part of a planned business expansion for the time after the company's debt rehabilitation is complete, Keeree said.

      At a glance

n Keeree Kanjanapas plans to invest about Bt23 billion to build 16 hotel and resorts across Thailand and overseas territories.

n A new joint venture will deliver hotel- and property-management services and other consultancy services to the hospitality and property industries.