AOT denies rumours of compromise with King Power over debt repayment

Airports of Thailand (AOT) has denied rumours that it made compromises with King Power Duty Free over debt repayment, insisting that it is adhering to the terms of its agreement.

The rumours stemmed from reports that AOT had approved King Power’s participation in a scheme extending the payment period for commercial operators and airlines at the six airports that had been facing liquidity issues. 

The concern was reflected in a sharp drop in AOT's share price, which fell by 1 baht to 30.25 baht per share, marking a decline of 3.20% from a low of 30 baht.Paweena Jariyathitipong, acting president of AOT, clarified to PostToday on Friday that the rumours were a misunderstanding, and that none of King Power’s requests had been accepted unconditionally.

She explained that King Power had made two requests: first, to waive the Minimum Guarantee and refrain from issuing invoices, and second, to reduce the Revenue Sharing to 20%. However, Paweena confirmed that AOT had not waived the Minimum Guarantee and had continued issuing invoices as usual.

She further assured that if King Power delays its payments, AOT will impose interest as per the usual procedures. 

"King Power issues invoices and has paid approximately 50% of the amounts, with the rest subject to interest for late payment," she said. "This means AOT has an initial understanding of how much will be paid, with interest applied to the outstanding balance."Regarding the Revenue Sharing issue, Paweena emphasised that AOT had rejected King Power’s proposal to pay 20%. After negotiations, it was agreed that King Power would pay 23% in Revenue Sharing, which is added on top of the previous payments.

"Therefore, AOT is proceeding with the agreement as originally planned, issuing invoices as usual. King Power is paying 23%, and any overdue amounts are subject to interest, which is a normal procedure," she said.

She elaborated that AOT was concerned about King Power’s risk of non-payment and requested additional bank guarantees. King Power, in turn, acknowledged the situation and assured that it would provide the extra guarantee.

“We have won every point, and it is beneficial to AOT in all respects. We don't understand where the communication went wrong," Paweena explained.

“AOT is not allowing a delay in payment; it is simply following the standard procedures. If you pay late, you pay a fine. If you want to extend the payment period, it’s entirely normal, and anyone can request it.”

She also revealed that AOT is currently in discussions with three top universities in Thailand to explore solutions for duty-free operations at airports under its responsibility. This is in line with ongoing procurement processes, and the results are expected to be clearer by next week.

Consultants will review legal, economic, financial, and business management aspects to analyse the limitations of the existing contracts and suggest fair and appropriate solutions for all parties involved. The findings are expected within 60 days, after which they will be submitted to the board for further consideration.

“If we compare the negotiations to a boxing match, King Power has conceded to all our terms. Our plans continue to proceed as originally outlined," Paweena added.

Despite the concerns, AOT had previously confirmed that the outstanding payments from King Power are still within the guarantee limits set by the company, which serves as financial security in case of unforeseen events.

Moreover, AOT remains financially stable and continues to look for alternative revenue streams, such as income from 400 Hz electrical systems, air-conditioning systems, ground handling services, third-party operators at Suvarnabhumi Airport, and commercial land development projects at all six airports. These efforts are expected to generate income unrelated to aviation activities.

AOT has reiterated that it has sufficient liquidity to support future investment projects and the execution of its plans without affecting its financial stability.

(2025/06/27-00:00)