The Erawan Group Public Company Limited (SET: ERW) has informed the Stock Exchange of Thailand that recently, Erawan Hotel Public Company Limited, a subsidiary of the company, was informed by the State Enterprise Contracting Party, which Erawan Hotel has entered into a land lease agreement with, that it has informed other relevant state agencies and officials to follow the next steps in the legal procedures that are in accordance with the Public-Private Partnership Act B.E. 2556 (2013).
However, Erawan Hotel has learned that to date, the relevant state agencies have not yet completed the process as required by the timeframe prescribed by applicable law, and accordingly entering into the renewal of the lease has not been completed and has been further delayed.
As a result, Erawan Hotel deems it necessary to exercise its legal rights through the judicial process to protect the rights and interests of Erawan Hotel and its shareholders. The objective is to expedite the request of relevant state agencies to fulfill their obligations under the agreement, which would also support confidence in the investment environment of the country.
During ongoing legal proceedings, Erawan Hotel remains fully operational as usual because Erawan Hotel has a written memorandum of understanding with the State Enterprise Contracting Party to continue managing its business in the Grand Hyatt Erawan Hotel, and has agreed to bind themselves and carry on their obligations according to the original lease up to entering into a renewal of a new lease pursuant to the aforesaid Grand Hyatt Erawan Hotel project.
ERW disclosed that itThe company and Erawan Hotel remains fully operational and continues to manage the their business with transparency, good governance, and responsibility to all stakeholders.
The company will provide further updates should there be any significant developments regarding this matter.
Erawan Hotel entered into a land lease agreement with the State Enterprise Contracting Party in 1987 to develop and operate the Grand Hyatt Erawan Bangkok Hotel.
The lease was originally granted for 30 years with an option to extend for an additional 20 years pursuant to a resolution of the Cabinet dated 24 February 1987. The agreement also specifies the formula for calculating the remuneration applicable to both the initial 30-year term and the subsequent 20-year renewal period. Erawan Hotel has continuously exercised its right to renew the original lease since 2015.
However, the State Enterprise Contracting Party has stated that the renewal of the lease must follow the legal procedures prescribed by applicable law. The State Enterprise Contracting Party has since initiated a land and property utilization project for the Grand Hyatt Erawan Hotel at the Ratchaprasong Intersection, Lumpini Subdistrict, Pathumwan District, Bangkok, in accordance with the Public-Private Partnership Act B.E. 2556 (2013), and Erawan Hotel has participated in the legal procedures under this framework.
In this regard, as the State Enterprise Contracting Party is in the process of renewing the original lease and the process has not yet been completed, the State Enterprise Contracting Party has therefore entered into a written memorandum of understanding with Erawan Hotel Company.
This agreement outlines various details to ensure smooth operations of the Grand Hyatt Erawan Hotel while awaiting the renewal of the original lease by the State Enterprise Contracting Party and other state agencies. Erawan Hotel has continuously provided full cooperation with the State Enterprise Contracting Party and other state agencies in all respects.
