BLand buys 5-star Vietnam hotel for RM253.5m

KUALA LUMPUR: Berjaya Land Bhd (BLand) is acquiring TPC Development Ltd (TPC), which has a 75% stake in a new five-star hotel in Vietnam, from Tradewinds Corporation Bhd for a total US$75 million (RM253.5 million) cash.

The consideration sum comprises US$25 million in equity interest and another US$50 million in the settlement of inter-company and shareholder debt owing to Tradewinds subsidiary Tradewinds Resources Sdn Bhd (TRSB).

In separate statements on Wednesday, the two companies said TRSB and BLand subsidiary Berjaya Leisure (Cayman) Ltd had signed a sale and purchase agreement for the proposed transaction.

TPC has a 75% stake in TPC Nghi Tam Village Ltd, which owns the five-star Intercontinental Hanoi Westlake Hotel that is expected to be launched in the first quarter next year.

On the rationale for the acquisition, BLand said Vietnam’s gross domestic product had been growing above 7% for the past few years.

“Due to the rapid economic growth and influx of tourists into Vietnam, major cities such as Hanoi and Ho Chi Minh are experiencing a shortage of five-star international hotels. The proposed acquisition represents a rare opportunity for the Berjaya group to acquire a newly completed five-star international hotel at a prime location close to Hanoi city centre,” it added.

The proposed acquisition will be funded mainly from borrowings and internally generated funds of BLand and is expected to be completed by the first quarter of 2008.

Meanwhile, Tradewinds Corp said its net gearing would improve to 1.5 times from 1.81 times based on its audited financial statements for the year ended Dec 31, 2006. The proceeds would be used to repay the group’s bank borrowings of RM150 million and for working capital purposes of RM103.5 million.

Tradewind Corp said TRSB’s original cost of investment in TPC Development was RM30.7 million.

By The EDGE (By Lim Yu Min)