BLand to buy another 5-star hotel in Hanoi
Posted on | December 13, 2007
By THE EDGE
KUALA LUMPUR: Berjaya Land Bhd (BLand) is set to expand its presence in Vietnam with a proposed acquisition of the Sheraton Hanoi Hotel and Towers from Faber Group Bhd for RM228.5 million cash.
“The acquisition of the Sheraton Hotel in Hanoi City, Vietnam, represents an opportunity for the BLand group to add another five-star international class hotel at a prime location in Hanoi City, Vietnam, to the group’s portfolio of hotels and resorts,” B-Land chief executive officer Datuk Francis Ng said in a statement yesterday.
He added that the company’s investment in the 299-room hotel and its earlier proposed acquisition of InterContinental Hanoi Westlake Hotel would enable the group to have a sizeable presence in the luxury hotel sector in Hanoi, while demonstrating its confidence and commitment with regard to the future of the country.
“Our immediate access to the booming hotel industry and riding on the robust economic boom driven by external and domestic consumption in Hanoi City would provide great potential for the expansion of our hotel business in Vietnam,” Ng said.
In a statement to Bursa Malaysia, BLand said Vietnam’s economic environment and the government’s effort in promoting tourism had resulted in an influx of tourists into the country, particularly in major cities such as Hanoi and Ho Chi Minh, which had a shortage of five-star international hotels.
Premised on the favourable conditions, the hotel was expected to perform well and would contribute positively to the future earnings of the BLand group, it said.
It said pursuant to the proposed acquisition, it would acquire Faber Labuan Sdn Bhd, which owned the Sheraton Hotel via its 70% subsidiary Vimas Joint Venture Co Ltd, for RM228.5 million cash from Faber Hotels Holdings Sdn Bhd. The proposed acquisition is expected to be completed in the first quarter next year.
BLand said funding for the proposed acquisition would be financed internally and from borrowings, adding it would assume RM56.95 million of Vimas’ borrowings as a result of the acquisition.
In a separate statement yesterday, Faber said the proposed disposal would unlock the value of its investment in Faber Labuan, adding that the company expected to realise a gain on disposal of about RM99.06 million based on the audited financial statements of Faber as at Dec 31, 2006.
The disposal would enable the Faber group to streamline its operations and focus its resources on the existing core businesses of healthcare facilities management and property development so as to enhance shareholders’ returns in the long run, it said.
Faber managing director Adnan Mohammad said the hotel was the only remaining hotel the company owned after the implementation of its debt restructuring exercise in 2004.
He added that the exercise was a fundamental component of the group’s strategic re-orientation to be a leading regional player in integrated facilities solutions and niche property development.
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