THE International Finance Corporation (IFC) is looking to invest 4.5 billion baht (US$137 million) in Asset World Corporation PCL (AWC) of Thailand in the form of green loan.
The green facility, announced on August 26, is still pending approval. The loan is expected to be compliant with the International Capital Market Association (ICMA) Green Bond Principles, and the proceeds will be used toward energy efficiency measures in the refurbishment of four hotels and the greenfield development of two new hotels in key tourism destinations of Thailand, including Bangkok, Hua Hin, Koh Samui and Chiang Mai.
The amount will also be applied as working capital to support the gradual re-opening of hotels following the Covid-19-related shutdowns. In a management discussion and analysis of its 2020 first half and second quarter performance, the company says that in March it temporarily closed almost all hotel operations and transferred all customers in Bangkok to The Athenee Hotel for reasons of operational efficiency and to manage expenses.
The total project cost is estimated at US$282 million. IFC’s proposed investment to the company consists of IFC A-loan to be disbursed in Thai baht. The IFC loan tenor of up to seven years will be much longer than what the company had obtained before, which was up to three years. It will also be the first unsecured loan for the company.
Through the proposed financing, IFC will also help AWC in building internal capacity with regard to green building and obtain EDGE certification for at least five hotels, which is to be confirmed. EDGE is a green building certification system focused on making buildings more resource-efficient.
AWC is the key real estate and hospitality arm of the TCC Group, one of Thailand’s most prominent conglomerates. It is the largest hospitality operator in Thailand in terms of number of rooms and has a growing and diverse portfolio of assets in hospitality and lifestyle destinations, retail and commercial workspaces, with 10 retail centres and four office buildings.
In September last year, AWC raised 48 billion baht in Thailand’s largest initial public offering of an individual company. It sold eight billion shares, including over-allotment option, at six baht each, with foreign investors accounting for 53% of the fund raising and domestic investors 47%. The proceeds were used to acquire assets, develop and renovate existing properties and repay debt.