SET-listed Bangkok Commercial Asset Management (BAM), the country's largest asset management company, is looking into a joint venture model to manage hospitality assets in an effort to help hotel business operators suffering from the protracted crisis.
Under the joint venture model, a creditor and a borrower would agree to transfer collateral debt assets to a third-party joint venture company.
BAM would be involved in the model by setting up a joint venture company and managing the transferred assets.
This is a solution to help hotel businesses and other industries looking to participate in the financial assistance model, separate from the government's asset warehousing concept, which is still being deliberated upon, said Bundit Anantamongkol, chief executive of BAM.
The conditions of the two asset management models would differ significantly.
Under the asset warehousing concept, which is jointly formulated by the Bank of Thailand and the Finance Ministry, a borrower needs to transfer assets to the existing creditor to be frozen in a warehousing portfolio set up by a commercial bank. The frozen asset would be managed by the creditor and could be leased to a borrower for business continuity until the two parties agree on a buy-back agreement.
Under BAM's joint venture model, the borrower would still be the business owner. Given BAM's asset management company (AMC) licence, the firm would be a third party setting up a joint venture company to manage distressed assets and this company would need to apply for an AMC business licence.
"BAM's survey found that some hotel business operators want to remain business owners rather than transferring their assets to banks [for management]. The joint venture model is another option and BAM would propose this to the central bank," according to Mr Bundit.