BTS ventures into property

Skytrain operator Bangkok Mass Transit System (BTS) is venturing into the property-development business in Bangkok and public-transport networks in neighbouring countries, thanks to ample cash after exiting its business-rehabilitation plan.

"Final details of the investment will be announced next year, chairman Keeree Kanjanapas said yesterday.

The investment plans were announced as new ways to boost revenue for the company, which has been in huge debt and faced huge losses for years.

After years-long conflict with creditors, a business-rehabilitation plan was set up, and the Central Bankruptcy Court yesterday approved the company's exit from it.

Under the plan, the three creditors - Deutsche Bank, Thai Asset Management and Thanachart Bank - hold a minority stake in the company. While Keeree, through newly established arm Siam Rai Transport and Infrastructure, owns 53.65 per cent, two new investors will own a combined 38.5 per cent. The new investors are UK-based Ashmore Investment Management and US-based Noondays Asset Management.

Cheng Tu Tung of Hong Kong-based New World Development owns 2.67 per cent.

Under the plan, BTS saw its total debts slashed sharply, from Bt67.75 billion to Bt10 billion. Its registered capital is now Bt15.89 billion, down from Bt18 billion before.

"We'll be able to repay all of the loans within eight years," Keeree said.

He said BTS now operated with Bt9 million in daily revenue, Bt3 million in daily operating expenses and Bt1 million in daily interest expenses. Earlier, interest expenses amounted to Bt8 million a day.

Keeree is bullish on the company's finances, forecasting a fiscal-2008 operating profit of Bt22 billion and Bt2.5 billion in earnings before interest, taxes, depreciation and amortisation.

He said BTS was ready to seek a listing in next year's first or second quarter as planned if market conditions allowed. BTS plans to offer 15 per cent of the shares to the public.

In the intervening period, the company will boost revenue mainly through the two new businesses, he said.

"With cash in hand of about Bt7 billion, we're ready to invest in property projects. However, we'll focus only on land along the train route. Our projects will be different from others, as our targeted customers will be mainly regular Skytrain passengers," he said.

Next year, the property arm could be established with registered capital of at least Bt5 billion. BTS will seek partners for the new business, because it will hold no more than 50 per cent in the new venture.

As well, it hopes negotiations to build public trains in two neighbouring countries will be finalised next year.

BTS will also proceed with plans to invest in the Green Line extension of the Skytrain.