Local hotel operators should consider using asset securitisation as a means of raising working capital to finance construction, according to Dr Olarn Chaipravat, an adviser to the Finance Ministry.
Dr Olarn, a former president of Siam Commercial Bank, noted that the government's new office complex on Chaeng Watthana Road would serve as a pilot case of securitisation in Thailand.
Bonds worth up to 25bn baht are expected to be issued starting next year to raise funds for the project, with long-term lease payments by state agencies to be used to finance payments to bond holders.
Hotels should consider securitisation as a new means of financing future growth, Dr Olarn said.
“In the past, one problem faced by hotels was the lack of collateral to guarantee new loans from local banks. And most loans offer terms which are shorter than the break-even point. With these financial limitations, the competitiveness of the hotel owner is limited,” he said.
