King Power shocks AoT with duty-free return bonanza
AoT shares jump 8% on news
published : 19 Jun 2019 at 17:20
writer: Thodsapol Hongtong
King Power has surprised Airports of Thailand (AoT) with an offer to pay the agency a much higher return than expected for operating duty-free shops and managing commercial areas at airports.
King Power promised the airport agency it would pay a guaranteed 23.5 billion baht for first-year operations of commercial areas at Suvarnabhumi, duty-free shops at Thailand's main gateway and shops at Phuket, Chiang Mai and Hat Yai airports.
AoT president Nitinai Sirismatthakarn said the returns were much higher than market expectations of only 10 billion baht for the first year from all three contracts.
King Power swept aside competing bids for operating duty-free shops and commercial zones in airports for 10 years starting from Sept 28 next year.
The company's winning bids were approved by the AoT board on Wednesday.
The victory came amid growing calls for AoT to end the monopoly of King Power at its airports.
The offer of unexpectly high returns from King Power boosted AoT shares, making them the most actively traded on Wednesday. The shares rose 5.75 baht to 73.75 baht, a gain of 8.46%.