CENTEL keen to buy back stakes from Lehman Brothers

Thailand’s Central Plaza Hotel CENT.BK (CENTEL) has expressed it’s desire to buy back stakes in two hotels on the Thai resort island of Phuket from failed U.S. investment bank Lehman Brothers. Lehman acquired the stakes in the Central hotels on Kata and Karon beaches for 240 million baht ($7 million). CENTEL runs 10 luxury hotels and five food franchises, including KFC and Mister Donut in Thailand. It plans to spend about 3 billion baht to open six new hotels in 2009, including one in the Maldives.

“If they sell, we are interested because we already own 50-51 percent stakes in each hotel,” CENTEL Chief Financial Officer Ronnachit Mahattanapreut told reporters. Despite all the economic and political crisis in Thailand, Ronnachit expected a 15-20 percent rise in third-quarter hotel revenues, with 6-7 percent coming from food services.

“We’re still going to do well in the third quarter. Last year we closed five different hotels, but this year we’ve added the Centara Grand to boost revenues,” Ronnachit said of the company’s new hotel in downtown Bangkok.

“Tourists from the Middle East, China, India and Russia are less affected by the financial turmoil in the United States and they are offsetting European tourist arrivals,” he said adding that the Centara Hotels & Resorts Leasehold property fund CTARAFu.BK is expected to expand to 10 billion baht over the next 2-3 years from 3.2 billion baht today.

Tisco Securities analyst Jitima Aungmanee said in a research note he expected CENTEL to book a 725 million baht gain in the third quarter from its new property fund.