CP Axtra disclosed further information regarding its investment in The Happitat, which is a project located in The Forestias, a luxury property mega project developed by Magnolia Quality Development Corporation Limited. This is after rising concerns among investors regarding the decision, appropriateness and the valuation of this investment.
CP Axtra has made several clarifications through the Stock Exchange of Thailand regarding the investment as follows:
1) To provide a correct understanding that the Company’s investment in Lotus’s Mall Bangna Project under the trademark “The Happitat” comprises the Company’s business undertaking whose risks are different from those of retail-wholesale business of the Company at present. There are press reports regarding this investment as well as news which are distorting and deviating from the facts regarding this investment, such of which is confusing and providing false information to the public. This causes misunderstanding amongst the shareholders and investors regarding the Company’s investment in Lotus’s Mall Bangna under the trademark The Happitat and may be significantly misleading in respect of the Company’s business operation in the manner which it may affect the Company’s securities price or decision to invest in securities of the Company and cause damages to the Company, our shareholders and investors. In these regards, the Company would like to advise that the Company’s investment in Lotus’s Mall Bangna under the trademark The Happitat is the investment under an ordinary course of business of the Company to generate investment value and return to the Company and our shareholders, and that the Company does not invest in The Forestias real estate development project as reported in some press media.
2) At present, the Company operates the retail/wholesale business and shopping mall management and is one of Asia’s leading retailers and wholesalers with over 2.7 million square meters of selling space and manage over 1.5 million square meters of shopping mall leasable spaces (including management of leasable space of the assets of Axtra Future City Freehold and Leasehold Real Estate Investment Trust) Therefore, the Company’s investment in the assets of Lotus’s Mall Bangna under the trademark The Happitat Project comprises the investment in the Company’s main business and normal business which will result in the Company’s large-scale shopping mall and retailing spaces of over 30 rai, of which the main component of space and income is derived from the management of shopping mall of 48,000 square meters in size and the opening of Lotus’s new format of hypermarket to further expand our current business operations – the wholesale, retailing and leasable space management – which are our expertise. The Company also has been implementing the strategies of ongoing development of shopping malls and retail spaces. Recently, the Company has launched Lotus’s North Ratchapreuk as the flagship model of smart life community mall with total area of over 47,000 square meters. The Company is also expanding leasable spaces in several other branches including Lotus’s Udon Thani, Lotus’s Saraburi and Makro Sathon, as well as the plan to develop more leasable spaces at 16 sites with high potential in the future. It is expected that by 2029, the Company will achieve the expansion of net leasable area (NLA) by more than 200,000 square meters, by which the shopping mall management business will significantly account for net profit of the Company.
3) Lotus’s Mall Bangna under the trademark The Happitat Project being located in Bang Na area is the strategic location for the Company’s wholesale/retail and shopping mall management business. Construction of over 80% of the Project has been completed. The investment is in the ownership of assets which will benefit the Company as it will provide the Company with the large-scale shopping mall and retail space on a strategic location within approximately 12 months and will be the Company’s assets for our drive for sustainable business growth. This saves 24 months of construction time and serves as an asset for the Company to use in its operation to react to the market situation in a timely and sustainable manner.
4) Regarding the valuation of assets of Lotus’s Mall Bangna under the trademark The Happitat Project, the Company selected 3 asset appraisal firms approved by the Office of the Securities and Exchange Commission (SEC) The 3 appraisers use the income approach method for the asset valuation which is a lower price than the cost approach method. The Company determines the asset value by using average value of the asset values valuated by the 3 appraisers, and upon deduction of indebtedness of financial institutions and other retail credits in relation to the Lotus’s Mall Bangna under the trademark The Happitat Project, the net asset value is amounted to THB 420 million.
5) The investment proportion of MQDC Town Corporation Limited in AGP of 5% reflects the value of assets used by MQDC Town Corporation Limited in its joint investment in AGP, comprising 100% shares (excluding 1 share) in The Happitat @The Forestias Co., Ltd. whose value is equal to the net asset value of Lotus’s Mall Bangna under the trademark The Happitat Project of THB 420 million as advised above, thus being equivalent to 5% of AGP registered capital of THB 8,390 million.
6) The Board of Directors of the Company considered and approved the Company’s investment in Lotus’s Mall Bangna under the trademark The Happitat Project with an investment of approximately 15,000 million baht on 7 November 2024 and the Audit Committee of the Company provided no opinion which is different from the opinion of the Board of Directors. In this regard, the Company completed the joint investment process and established a new subsidiary company (AGP) with the Department of Business Development, Ministry of Commerce on 13 December 2024.
7) Lotus’s Mall Bangna under the trademark The Happitat Project is located on the land lots of approximate area of 30 rai, 2 ngarn and 18.5 square wah with total building area of 211,910 square meters comprising:
- Shopping mall space consisting of 3 buildings – N1, N2 and N3 building – with a total area of 145,929 square meters, representing 69% of total building area;
- Premium office building space of 10 stories on floor 7 – 16 of N2 building with a total area of 10-storey building of 49,550 square meters, representing 23% of total building area;
- Central Utility Plant (CUP) space being located over N2 building, which is a public utility center producing drinking water and cooling systems, with a total area of 16,431 square meters, representing 8% of total building area.
Project’s construction progress is over 80% and the commercial operation is expected in 2026
8) The Company’s sources of funds for the investment in AGP registered capital and expected additional investment funds for Lotus’s Mall Bangna under the trademark The Happitat Project are loan facilities from financial institutions and cash of the Company.
9) The Project has undergone detailed and careful analysis and planning and is under prudent financial management; these allow the Company to be able to control the indebtedness at appropriate level while providing the stable financial structure; creditable financial partners also reduce concern regarding effect on financial ratios.
10) The Company stresses that we focus on the main business of wholesale/retail and shopping mall management which is in line with our business growth plan. The Company is committed to the principles of corporate governance for the maximum benefit of the Company and all stakeholders.
