THAILAND. Airports of Thailand (AOT) on Friday (27 June) issued a clarification of its acceptance of King Power Duty Free Company’s (KPD) request to join the airport company’s extended payment terms scheme for concessionaires and airlines facing liquidity problems.
As reported, KPD has been seeking solutions (including possible contract termination) related to the severe financial pressures it faces with its three duty-free concessions at:
1) Suvarnabhumi Airport;
2) Don Mueang International Airport;
3) Phuket International, Chiang Mai International and Hat Yai International airports.
As reported, the matter has been referred to an external committee charged with finding a solution within 60 days.
While awaiting a conclusion, KPD requested to pay a fee based on 20% of its monthly sales volume.
However, AOT insisted on collecting the minimum guarantee as per the agreed terms and conditions of the three concessions.
On 23 June, KPD submitted a letter to AOT asking to participate in the extended payment terms scheme. That request was approved two days later.
AOT said, “In essence, KPD can split payments on the difference of revenue sharing and minimum guarantee and defer partial minimum guarantee payments for another eight months of each tranche as follows:
- 1 June-October 2025: For the duty-free concession contract at Suvarnabhumi Airport (except for the tranche for June 2025, which is to be extended for another six months)
- 2 September-October 2025: For the duty-free concession contract at Don Mueang International Airport
- 3 July-October 2025: For the duty-free concession contract covering Phuket International, Chiang Mai International and Hat Yai International airports.”
KPD must pay 8.8440% interest per year, which is in accordance with the previous measures of each tranche of overdue minimum guarantees to AOT every month.
KPD must also provide additional collateral of THB1.45 billion (total value of all three contracts) to AOT to cover the deferred amount of minimum guarantees plus interest, to ensure its financial obligations in case of unexpected events.
Upon consideration of the collateral placed by KPD, AOT has found that it still covers the deferred minimum guarantee payments plus an 18% penalty for default per year, thus safeguarding the airport company against unexpected events and additional risks.
AOT said KPD must place additional collateral in case of delayed payments. “KPD insists on making partial payments, collected by AOT pursuant to the contracts, plus interest on delayed payments according to the extended payment terms scheme during the wait for AOT’s study findings,” the clarification continued. ✈
TENDER ALERTThe Moodie Davitt Report is the industry’s most popular channel for launching commercial proposals and for publishing the results. If you wish to promote an Expression of Interest, Request for Proposals or full tender process for any sector of airport or other travel-related infrastructure revenues, simply email Martin Moodie at Martin@MoodieDavittReport.com. We have a variety of options that will ensure you reach the widest, most high-quality concessionaire/retailer/operator base in the industry – globally and immediately. The Moodie Davitt Report is the only international business media to cover all airport or other travel-related consumer services, revenue-generating and otherwise. Our reporting includes duty-free and other retail, food & beverage, property, passenger lounges, art and culture, hotels, car parking, medical facilities, the internet, advertising and related revenue streams. Please send relevant material, including images, to Martin Moodie at Martin@MoodieDavittReport.com for instant, quality global coverage. |
