Thai food, hotel firm Minor plans $1.3 billion spend, overseas buys

BANGKOK Tue Jan 8, 2013 5:29am EST

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BANGKOK (Reuters) - Thai hotel and fast-food chain operator Minor International Pcl (MINT.BK), which runs Burger King, Dairy Queen and The Pizza Company outlets across Asia, plans to spend at least 40 billion baht ($1.3 billion) through 2017 on expansion and acquisitions.

Minor, which competes with the likes of Yum Brands Inc (YUM.N) and Central Plaza Hotel Pcl CENT.BK, expects to buy at least one food asset in China this year, Corporate Chief Financial Officer Trithip Sivakriskul said on Tuesday, without giving details.

In late December Minor expanded in China, taking a 49 percent stake in Sichuan-style barbecue fish specialist Beijing Riverside & Courtyard, a move to turn around its loss-making operations there, Trithip told Reuters in an interview.

"Doing business in China is difficult, but it is a big market. We have operated in China for almost 10 years. We want to strengthen our presence there," she said.

Minor, which wants to double its annual revenue to 60 billion baht by 2017, is also looking for other foreign assets outside China to grow its food and higher-margin hotel businesses.

Minor, which majority-owns hotels run under the Four Seasons, Marriott, St Regis and other brands, as well as other hotel joint ventures and management contracts, expects average growth in revenue and net profit of 15-20 percent a year over the next five years, Trithip said.

Food and hotel businesses contribute 45 percent each of revenue and the rest from trading business.

The investment capital will come from cash flow and loans. The firm does not plan to raise money from bond sales this year as it expects to bring in around 4 billion baht from a recent warrant issue, Trithip said.

Minor, currently trading at a record high, is up 99 percent over the last year, far outperforming a 36 percent gain in the benchmark index .SETI. Among its Thai rivals, Central Plaza is up 162 percent and Erawan Group (ERW.BK) is up 85 percent, according to Reuters data.

The company, due to release earnings next month, is expected to post net profit of 3.1 billion baht for 2012, up from 2.88 billion in 2011, according to Thomson Reuters I/B/E/S.

Minor, founded by U.S.-born entrepreneur William Heinecke, who was ranked 24 on the Forbes list of Thailand's richest people in 2012, has been helped by greater numbers of tourists visiting Thailand in the past year, and its restaurant business has also taken advantage of robust domestic consumption.

Thailand's tourist arrivals are expected to hit a record 21.5 million in 2012, the government has said. Analysts estimate it to top 23 million in 2013 as Thailand, boosted by room rates for luxury hotels which are cheaper than Asian neighbors.

"We have seen strong demand for hotel accommodation with gradual increase in occupancy rates," Trithip said.

Minor, which bought Australia's Oaks Hotels and Resorts Ltd in June 2011, will focus on joint ventures and management contracts for the expansion of its hotel business overseas, she said.

($1 = 30.44 Thai baht)

(Additional reporting by Tripti Kalro in Bangalore; Editing by Daniel Magnowski)

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