by millionairemind » Tue Jan 20, 2009 6:18 pm
January 20, 2009
Mandarin Oriental sells Macau hotel stake for US$205m
By UMA SHANKARI
Mandarin Oriental International, a member of the Jardine Matheson Group, said on Tuesday that it has agreed to sell its 50 per cent interest in the 416-room Mandarin Oriental in Macau for HK$1.6 billion (US$205 million).
The company will sell its stake to Sociedade de Turismo e Diversoes de Macau (STDM). Mandarin Oriental's partner in the hotel, Shun Tak Holdings, will also sell its 50 per cent stake to STDM.
The carrying value of the group's 50 per cent stake in the hotel as at December 31, 2007 was US$15.7 million and its contribution to the group's Ebitda (earnings before interest, tax, depreciation and amortisation) in 2007 was US$10.2 million, the company said.
On the sale's completion, Mandarin Oriental will receive proceeds of about US$90 million with a post tax gain of about US$75 million, which will be recognised in 2009. The proceeds will be used for the group's general corporate purposes, it said.
Completion of the sale is expected by the end of May 2009. The sale is conditional upon approval of the arrangements by Shun Tak's and STDM's respective shareholders as well as other regulatory formalities.
As part of the agreement to sell, Mandarin Oriental and Shun Tak also have the right to participate equally in any increase in the hotel site's value - over and above the agreed value of HK$1.6 billion (US$205 million) - which might arise if the property were to be redeveloped or sold to a third party in the future.
The property will be re-branded by STDM. However, under a short-term management arrangement, Mandarin Oriental will continue to manage the hotel for up to two years to ensure a smooth transition.
'The dynamic city of Macau remains an important destination for the Group. We will work closely with the new owner to ensure a successful transition for this property.
At the same time, the group will manage a new 213-room Mandarin Oriental hotel on the waterfront of Macau, when it opens in early 2010,' said Edouard Ettedgui, group chief executive of Mandarin Oriental Hotel Group.
Source: Business Times
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