Key points
- Grande Asset Hotels and Property Public Company Limited, the former owner of Bangkok’s iconic Royal Orchid Sheraton Hotel, has announced fresh defaults on interest payments relating to two additional debenture issues while also postponing its Extraordinary General Meeting (EGM) once again.
- The company has attributed the latest payment failures to severe liquidity constraints caused by delays in planned asset sales and difficulties in securing financing for debt repayments.
- This Thailand Hotel News report comes as Grande Asset continues to grapple with the aftermath of losing ownership of the Royal Orchid Sheraton Hotel, raising further uncertainty over the future of its remaining hotel portfolio and broader property operations.
Grande Asset Hotels and Property Public Company Limited, the former owner of Bangkok’s iconic Royal Orchid Sheraton Hotel, has announced fresh defaults on interest payments relating to two additional debenture issues while also postponing its Extraordinary General Meeting (EGM) once again. It also postponed a bond holders meeting. The latest disclosures, submitted to the Stock Exchange of Thailand (SET), underscore the mounting financial pressures confronting the hospitality and property company, whose largest shareholder is Property Perfect.
Image Credit: Thailand Hotel News
The company has attributed the latest payment failures to severe liquidity constraints caused by delays in planned asset sales and difficulties in securing financing for debt repayments. This Thailand Hotel News report comes as Grande Asset continues to grapple with the aftermath of losing ownership of the Royal Orchid Sheraton Hotel, raising further uncertainty over the future of its remaining hotel portfolio and broader property operations. The repeated postponement of shareholder and bondholder meetings has also intensified concerns among investors seeking greater clarity on the company’s restructuring plans.
Two More Debentures Enter Default
According to the company’s filing, Grande Asset has defaulted on interest payments for two secured debenture series, GRAND257A and GRAND25DA.
The GRAND257A debenture carries an outstanding principal of 616.075 million baht, while GRAND25DA has an outstanding principal amount of 359.9 million baht. Together, the two issues represent nearly 976 million baht in outstanding principal.
Grande Asset stated that proceeds from planned asset disposals have yet to materialize, leaving it without sufficient cash flow to meet the scheduled interest payments. As a result, both debentures are now officially in default under the terms and conditions governing the bond issues.
For GRAND257A, accrued unpaid interest before withholding tax totals approximately 7.93 million baht, with a default interest rate of 9.70 percent per annum. Meanwhile, GRAND25DA has accrued unpaid interest of approximately 5.51 million baht, with default interest initially set at 9.55 percent per annum before increasing to 9.70 percent after the specified period.
Risk of Cross Defaults Remains
The company warned that the latest payment failures could potentially trigger cross-default provisions affecting several other outstanding debenture series, including GRAND254A, GRAND257B, GRAND259A, GRAND264A, GRAND250B, GRAND259B, GRAND263A, GRAND271A and GRAND267A.
However, Grande Asset explained that an immediate cross default has not yet occurred because the debentureholders’ representative, Dao Securities (Thailand) Public Company Limited, has instead issued notices requiring the company to remedy other contractual breaches within 30 days. During this period, the company intends to seek approval from bondholders for amendments to repayment schedules and other debt restructuring measures.
This temporary reprieve provides Grande Asset with a limited window to negotiate revised repayment terms before broader acceleration clauses could potentially be enforced across its outstanding debt obligations.
Liquidity Crisis Deepens
Grande Asset cited several factors behind its worsening financial position, including the prolonged slowdown in Thailand’s real estate sector, delays in executing planned asset sales and slower-than-expected arrangements for new credit facilities.
These challenges have significantly weakened the company’s cash flow, preventing it from meeting scheduled debt obligations despite ongoing efforts to dispose of assets and restructure its financial position.
The company has already experienced multiple debt payment difficulties over recent months, highlighting the extent of its liquidity problems. Investors have become increasingly concerned as successive defaults continue to emerge while the company’s restructuring efforts remain incomplete.
Bondholder Meetings Scheduled
Grande Asset has scheduled meetings for holders of 10 separate debenture series, during which investors will be asked to consider several critical proposals.
Among the principal agenda items are requests to waive existing events of default, approve revised repayment schedules for both principal and interest, and allow flexibility regarding the closing of bondholder registers for meeting participation.
The company is hoping these measures will provide additional time to complete pending asset sales and strengthen its financial position sufficiently to meet future obligations.
The postponement of the Extraordinary General Meeting further reflects the complexity of the company’s ongoing financial restructuring as management continues discussions with creditors and stakeholders.
Grande Asset’s financial difficulties have attracted significant attention because of its previous ownership of the prestigious Royal Orchid Sheraton Hotel, one of Bangkok’s landmark riverside hospitality properties. Following the disposal of that flagship asset, uncertainty continues to surround the long-term prospects of the company’s remaining hotels and real estate portfolio as it works to navigate one of the most challenging periods in its corporate history.
The coming weeks are likely to prove crucial for Grande Asset as bondholders evaluate the company’s restructuring proposals and management attempts to complete delayed asset sales that it believes are essential for restoring liquidity. The outcome of these negotiations will be closely watched by investors, creditors and Thailand’s hospitality sector, as they will help determine whether the company can stabilize its finances and avoid a wider series of debt defaults while preserving the future of its remaining hotel and property businesses.
References:
https://www.set.or.th/th/market/news-and-alert/newsdetails?id=105627001&symbol=GRAND
https://www.set.or.th/th/market/news-and-alert/newsdetails?id=105639701&symbol=GRAND
https://www.set.or.th/th/market/news-and-alert/newsdetails?id=105657101&symbol=GRAND
Read Also:
https://thailandhotel.news/a-deeper-dive-into-shareholders-of-grande-asset-hotels/
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