Thai contractor, FICO team up to buy UK hotel chain for $119m

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Thailand s construction contractor Thai Industrial and Engineering Service PLC (T)1 will set up a 50:50 joint venture company with Fico Corporation2 to take over Jupiter Hotels Holdings Ltd (JHH)3, a UK-based hotels operator, for 77.5 million pound (around $119 million). The joint venture will acquire 27.1 million shares or 100 per cent of JHH s paid-up capital, at a par value of one pound each, from Patron Jupiter Holding SARL and West Register Hotels (Holdings) Limited, indirectly held by Patron Capital LP4 and Royal Bank of Scotland5, respectively. JHH indirectly holds the entire shares in Jupiter Hotels Co, which operates 26 hotels with total 2,883 rooms in the UK. All the hotels are now being managed by ACCOR Group under Mercure Brand until 2031.

Based on the preliminary agreement, the new JV firm will borrow 82.5 million pound from financial institutions and lend it to JHH to enable the latter to become debt-free. However, the total price of asset acquisition and loan repayments will not exceed 160 million pound.

This will be our first diversification into hotel business and first expansion outside Thailand. We not only expect return from the operation but also see the opportunity to turn these assets into a real estate investment trust (REIT) in the future, said Thai Industrial managing director Tradsin Chongussayakul. The firm will fund the acquisition through cash reserves, borrowings and private placement of shares. While 20 million pound will come from cash, the firm will borrow 120 million pounds from banks. The remaining 20 million pound will be raised from a private placement of 30 million shares at the price of 0.10 baht apiece, offered during August 10 to October 7, 2015.

As of the end of 2014, JHH had total asset of 7.33 billion baht and the net profit in the last four quarters of 215.11 million baht.

The average occupancy rate in 2014 was 66 per cent, slightly up from 65 per cent in 2013 and 61 per cent in 2012.

Also read:

Thailand s Fico plans to list hotel biz in London next year6

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References

  1. ^ Thai Industrial and Engineering Service PLC (T) (www.tiesco.co.th)
  2. ^ Fico Corporation (www.ficocorporation.com)
  3. ^ Jupiter Hotels Holdings Ltd (JHH) (www.jupiterhotels.co.uk)
  4. ^ Patron Capital LP (www.patroncapital.com)
  5. ^ Royal Bank of Scotland (www.rbs.com)
  6. ^ Thailand s Fico plans to list hotel biz in London next year (www.dealstreetasia.com)

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