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Execution & completion of Banyan Tree and Vanke partnership in China

Vicky Karantzavelou - 15 August 2017, 00:06

BTAC will be a company with net tangible assets value of approximately S$100 million, and the intention is for it to become a sizeable company by acquiring or developing hotels and resorts in the People's Republic of China bearing the Banyan Tree brands.

Singapore - Banyan Tree Holdings Limited announced that it has executed and completed the definitive agreements with China Vanke Co., Ltd (Vanke) to create Banyan Tree Assets(China) (BTAC), a 50:50 joint venture incorporated in Singapore between Banyan Tree and Vanke, to consolidate the ownership of its Banyan Tree-branded hotels and assets in China. BTAC in turn has invested in and holds a 40% stake in each of Banyan Tree's operating companies incorporated in Singapore, Banyan Tree Hotel Management (China) (BTMC) and Banyan Tree Services (China) (BTSC) respectively.

Based on the agreed valuation methodology, Vanke will (via share subscription):

  1. inject a sum of approximately S$72 million (subject to post-completion adjustment) into BTAC, in return for newly issued shares amounting to a 50% stake in BTAC, and
  2. inject a further sum of approximately S$18 million in aggregate into BTMC and BTSC, for Vanke's effective stake in BTMC and BTSC.

The illustrative financial effect of the abovementioned transactions on the net profits attributable to shareholders of Banyan Tree as reflected in the latest unaudited financial statements of Banyan Tree for the six months ended 30 June 2017, after factoring in estimated legal and professional fees and other expenses relating to the said transactions and assuming the said transactions take place on 30 June 2017, will amount to approximately S$39 million.

BTAC will be a company with net tangible assets value of approximately S$100 million, and the intention is for it to become a sizeable company by acquiring or developing hotels and resorts in the People's Republic of China bearing the Banyan Tree brands.

Banyan Tree will also allot and issue new shares equivalent to approximately 4.99% equity stake in Banyan Tree to Vanke for an amount of approximately S$24 million, with an additional issuance and options that will enable Vanke to acquire in aggregate a 10% equity stake in Banyan Tree.


Photo caption: Banyan Tree Lijiang




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