Published on 11/07/2014
Fico spends B3.5bn on European hotels Fico Corporation aims to acquire up to 20 more hotels in Europe over the next two years after flagging its first investment there by buying nine hotels worth 80 million euros (3.5 billion baht) in Germany and Belgium. The acquisitions, however, depend on investment opportunities, said chief executive Krit Srichawla. The acquisition of the mid-range hotels is in line with Fico's plan to expand overseas, he said, noting that even though the euro zone is in a nascent economic recovery, some countries including Germany have solid economic fundamentals. "We are delighted to announce the latest strategic additions to Fico Group’s expanding portfolio of assets beyond our home base,” said Mr Krit. “The group was looking at opportunities in Europe and this portfolio will strengthen our core hospitality business." The nine hotels are Days Inn Berlin West, Days Inn Dresden, Ibis Hotel Erfurt Ost, Ibis Gelsenkirchen, TRYP by Wyndham Bad Oldesloe, TRYP by Wyndham Berlin City East, TRYP by Wyndham Leipzig North, TRYP Wyndham Garden Bad Malente and TRYP by Wyndham Antwerp. Fico, whose roots are in manufacturing and textiles, has extended its operations to luxury retail, construction, commercial property and hotel development. It owns 16 Thai hotels, including Novotel Silom, Novotel Ploenchit, Grand Millennium Sukhumvit and Mercure Samui, and three commercial office towers. It also has five projects under development. Popular Bangkok restaurants including Iron Fairies, Fat Gut'z, Mr Jones' Orphanage Milk Bar and Clouds are part of Fico's empire. It also holds a 34% stake in Evolution Capital, the exclusive franchisee in Thailand for Domino's Pizza and The Coffee Bean & Tea Leaf. Mr Krit said the nine acquired hotels are expected to yield a return of 8-9% per year and the breakeven point is expected in the 10th year.
Fico yesterday agreed a financing contract worth 45 million euros with Krungthai Bank (KTB) to partly finance the acquisitions. KTB senior executive vice-president Kittiphun Anutarasoti said the bridging loan has a two-year maturity because the bank wants to see a clearer plan of the acquisitions. He said KTB's corporate loans this year are likely to grow by 10%, exceeding the target of 6% despite the economic doldrums in the first half. "Our loan growth in the first half outpaced the full-year target," said Mr Kittiphun. The country's second-largest lender by assets will focus on boosting non-interest income, especially from trade finance and foreign exchange.