New Nordic Thailand: Update February 22
We would first like to wish all our clients and partners best wishes in the year ahead. As we enter 2022, we are hopeful that we will see a revival of the travel and tourism industry which has been so devastated by the global pandemic. As always, we are carefully monitoring all developments in Thailand and around the region to continually revise our plans based on the information available.
The months of December and January have brought a massive surge of the Omicron variant to Thailand and many other countries, which fell across Thailand’s peak tourism season and which, in turn, resulted in the Thai Government reversing decisions to open the country to relatively unfettered international tourism. Pattaya itself was hit particularly hard with this variant, with many staff and guests testing positive over the past few weeks. Recently, however, it is encouraging to see that this variant, while highly transmissive, does not seem to be as deadly as previous strains. We support the Thai government in their renewed efforts for a cautious, sensible reopening of the tourism sector through the Sandbox and Test & Go programs and look forward to further developments soon.
Our executive team continues to work on the rehabilitation effort for New Nordic Development, one of our five Thai development companies which has petitioned the court for business reorganization. As we have previously communicated, the court has postponed the initial hearing twice due to COVID restrictions and the large caseload in the Court. We currently await the next scheduled hearing date in May, 2022.
Some clients have asked why we have not communicated more or detailed our plans for the rehabilitation of New Nordic Development. We would like to reiterate that the court has not yet ordered NND into business reorganization (awaiting the hearings in May), nor appointed a planner. The Plan of business reorganization must be prepared by the Planner and will take into consideration the status of the company at that time and the business opportunities which will be forecast at that time. it is simply not possible for the company to preempt the determinations of the Planner.
At the same time, we would like to assure clients that we are continuing to explore a variety of possibilities to enhance the business opportunities for New Nordic Development for the future. As we have alluded to in previous newsletters, this may include upgrading or repurposing buildings and finding new ways to monetize assets beyond hotel operations and long-term rental. We look forward to working with the Planner to share these plans with you during the formal process and to have these incorporated within the Plan as appropriate, after which all clients and creditors will have the opportunity to vote on the plan.
We would also like to address questions concerning the Phetchaburi Park project. This project, including the associated assets of lands and approvals, are included in the New Nordic Development rehabilitation petition. It should be noted that New Nordic Development also contains many of our projects in Pratumnak Hill in Pattaya, so it is not correct to assume Phetchaburi Park clients are by themselves in the process. The Planner will address the concerns of Phetchaburi Park clients through the formal rehabilitation process.
As to our other development companies in Thailand, we continue to work on alternative strategies for the resumption of sustainable operations post-COVID. While we understand the desire of some clients to resume construction activities as soon as possible, we have little choice but to continue to rely on a prudent and measured strategy making decisions based on data as it becomes available. At this point in time, it is still very difficult to estimate basic hotel operations metrics such as daily rate and occupancy, and, disappointingly, it is becoming increasingly apparent that it will take at least 2-3 years before the number of global travelers return to 2019 levels. This being said, we continue to explore multiple options for operating these projects including in-house operation as originally planned, leasing the property to a global “branded” operator or retooling the project to focus on long term rentals.
As always, our team stands by to answer any questions you may have. Simply e-mail firstname.lastname@example.org and we’ll get back to you as soon as possible. Support is available in both English and French.
We look forward to providing further updates soon.
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