Ashton Asoke reprieve boosts ANAN shares
Office of the Council of State has determined that the highrise building project does not need to be demolished
Shares of ANAN surged 10.29% after the Office of the Council of State determined that the Ashton Asoke project does not need to be demolished and that new construction permits can be obtained.
Analysts noted that this resolution significantly enhances the company’s outlook, with a potential turnaround expected in the second half of next year.
This Tuesday morning (August 27), ANAN, or Ananda Development Pcl, saw its stock rise by 10.29%, adding 0.07 baht to reach 0.75 baht per share.
Kornphat Worachet, director of research and investment services at Krungsri Securities, said: "As a result, ANAN does not need to demolish the Ashton Asoke building. The matter is expected to be resolved as early as Q3/2024 or by early Q4/2024 at the latest."
Investors may consider speculative trading, as the risk has decreased, and ANAN will gradually clear its inventory. The company’s future bond issuance is also unlikely to face difficulties.
However, while the business is addressing its issues, a turnaround is anticipated to occur in the second half of next year. Although earnings are expected to recover later in the year, investors should take a long-term view or engage in speculative trading for now, analysts say.
The Bangkok Metropolitan Administration (BMA) had consulted with the Council of State on how to comply with the court's order to revoke the construction permit. The Council of State responded on Monday that since the court’s order rendered the original permit void, the project was built without a permit.
The BMA must ensure compliance with the law, allowing the developer to submit a new application retroactively, avoiding the need for demolition.
Ashton Asoke is a high-rise condominium project with 50 floors and 783 units.
Under the law governing the construction of “large buildings”, a high-rise condominium must have at least one side of its land adjoining a public road for a continuous length of not less than 12 metres and must extend continuously up to the location of the building, ensuring sufficient space for emergency-vehicle access.
The project negotiated with the Mass Rapid Transit Authority (MRTA) to expand this access point to 12 metres, paying nearly 100 million baht in compensation, which led to the issuance of the permit and subsequent construction.
However, the Central Administrative Court ruled that using the MRTA land, which had originally been expropriated for public transit use, to expand the project's access was inappropriate as it solely benefited a private entity.
The Supreme Administrative Court’s decision in July to revoke the construction permit for the Ashton Asoke condominium was due to the lack of a legal access route, but it did not order the building’s demolition.
