Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
THE HONGKONG AND SHANGHAI HOTELS, LIMITED
(Incorporated in Hong Kong with limited liability)
(Stock Code: 00045)
Discloseable Transaction
Restructuring of Joint Venture Arrangements in Thailand
The Board of Directors of the Company wishes to announce that on 27 August 2020, PIIHL, a wholly-owned subsidiary of the Company, has entered into heads of terms with the Phataraprasit Shareholders, to confirm their agreement to restructure the current arrangements between the Company and the Phataraprasit Shareholders in relation to their respective shareholding in HSH-SCH. Subject to the signing of definitive and legally binding agreements and following the completion of the restructuring, the joint venture relationship between the parties in HSH-SCH will cease. Upon Completion, the Company will, through its subsidiaries, acquire the Phataraprasit Shareholders' 50% economic interest in The Peninsula Bangkok and its surrounding land in consideration for its 50% economic interest in the Thai Country Club and TCC Land Parcels and the Cash Consideration. The Cash Consideration shall be paid to the Phataraprasit Shareholders on Completion.
Prior to the restructuring, the Company, through its subsidiaries, and the Phataraprasit Shareholders had entered into 50/50 joint venture arrangements in HSH-SCH to own and for the Company to manage The Peninsula Bangkok and the Thai Country Club. As part of the restructuring, HSH-SCH and its subsidiaries shall undergo all necessary internal restructuring such that HSH-SCH shall own 100% equity interest in The Peninsula Bangkok and its surrounding land upon Completion.
Upon completion of the Transaction, the Company will (i) assume full responsibility and control over the development, management and future operations of The Peninsula Bangkok and its surrounding land, as well as be entitled to the profits and assume the liabilities and expenses of the hotel and its surrounding land; and (ii) cease to have any responsibility over the development, management and future operations of the Thai Country Club and TCC Land Parcels. The restructuring is in line with the Company's principal business of hotel ownership and management and reflects the desire of the Company and the Phataraprasit Shareholders to resolve all current and contingent disputes (including the dispute on the hotel management agreement relating to The Peninsula Bangkok).
The Total Consideration was arrived at after arm's length negotiations between the Parties and having regard to the market values of The Peninsula Bangkok and its surrounding land, the market values of the Thai Country Club and TCC Land Parcels and consideration to
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resolve all disputes between the Parties. The Cash Consideration shall be funded from the Company's own resources.
As the applicable percentage ratio of the Transaction under Chapter 14 of the Listing Rules is 5% or more, but is less than 25%, the Transaction constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules. The Transaction is subject to a number of conditions precedent. Appropriate disclosure will be made by the Company when the definitive agreements effecting the Transaction are signed.
To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, the Phataraprasit Shareholders are connected persons (as defined in the Listing Rules) at the level of the Company's subsidiary, HSH-SCH, and the Transaction with the Phataraprasit Shareholders are at the subsidiary level only. The exemption contained in rule 14A.73(10) of the Listing Rules shall apply and the Transaction shall not be regarded as a connected transaction.
The key terms of the Heads of Terms are set out below:
Heads of Terms | |
Parties: | PIIHL |
Mr. Praphan Phatraprasit | |
Mr. Prasong Phataraprasit | |
Date: | 27 August 2020 |
Purpose: | The parties have entered into the HOT to confirm their |
agreement to restructure their respective shareholdings in | |
and assets of HSH-SCH. Upon completion of the | |
Transaction, the Company will (i) assume full | |
responsibility and control over the development, | |
management and future operations of The Peninsula | |
Bangkok and its surrounding land, as well as be entitled | |
to the profits and assume the liabilities and expenses of | |
the hotel and its surrounding land; and (ii) cease to have | |
any responsibility over the development, management | |
and future operations of the Thai Country Club and TCC | |
Land Parcels. The restructuring is in line with the | |
Company's principal business of hotel ownership and | |
management. | |
Transaction: | Upon Completion, the Phataraprasit Shareholders to |
transfer their entire 50% interest in HSH-SCH to PIIHL | |
and/or its designated persons in exchange for the | |
Company's 50% economic interest in the Thai Country | |
Club and TCC Land Parcels and the Cash Consideration. | |
HSH-SCH and its subsidiaries shall undergo all | |
necessary internal restructuring such that HSH-SCH shall | |
own 100% equity interest in The Peninsula Bangkok and | |
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its surrounding land upon Completion.
The unaudited net profit/(loss) before and after tax attributable to HSH-SCH for the year ended 31 December 2018 amounted to THB10 million (approximately HK$2.5 million) and THB(35) million (approximately HK$(8.7) million) respectively. The unaudited net profits before and after tax attributable to HSH-SCH for the year ended 31 December 2019 amounted to THB42 million (approximately HK$10.4 million) and THB33 million (approximately HK$8.2 million) respectively.
SCH owns The Peninsula Bangkok and its surrounding | ||||
land. The unaudited net profit/(loss) before and after tax | ||||
attributable to SCH for the year ended 31 December | ||||
2018 amounted | to | THB32 million | (approximately | |
HK$7.9 million) and THB(3) million | (approximately | |||
HK$(0.7) million) respectively. The unaudited net profits | ||||
before and after tax attributable to SCH for the year | ||||
ended 31 December 2019 amounted to | THB67 million | |||
(approximately HK$16.6 million) and THB66 million | ||||
(approximately HK$16.3 million) respectively. | ||||
TCS owns the Thai Country Club and TCC Land Parcels. | ||||
The unaudited net losses before and after tax attributable | ||||
to TCS for the year ended 31 December 2018 amounted | ||||
to THB6 million (approximately HK$1.5 million) and | ||||
THB6 million (approximately HK$1.5 million) | ||||
respectively. The unaudited net losses before and after | ||||
tax attributable to TCS for the year ended 31 December | ||||
2019 amounted to THB5 million (approximately HK$1.2 | ||||
million) and THB8 million (approximately HK$2 | ||||
million) respectively. TCE is a dormant company. | ||||
Anticipated Completion | On or before 30 September 2020 | |||
Date: | ||||
Consideration and Financial Commitment | ||||
Total Consideration: | The Total Consideration comprises of the 50% economic | |||
interest in the Thai Country Club and TCC Land Parcels | ||||
and the Cash Consideration. The Total Consideration | ||||
was arrived at after arm's length negotiations between | ||||
the Parties and having regard to the market values of The | ||||
Peninsula Bangkok and its surrounding land in the | ||||
aggregate amount of approximately THB3.1 billion | ||||
(approximately HK$770 million), the market values of | ||||
Thai Country Club and TCC Land Parcels in the | ||||
aggregate amount | of | approximately | THB2.4 billion | |
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(approximately HK$590 million) and consideration to | |
resolve all disputes between the Parties. | |
Cash Consideration: | The Cash Consideration for the Transaction is US$70 |
million (approximately HK$546 million) in cash, | |
exclusive of applicable taxes. The Cash Consideration | |
shall be paid to the Phataraprasit Shareholders and/or | |
their respective designated persons on Completion. | |
The Cash Consideration shall be funded from the | |
Company's own resources and would be paid on | |
Completion. | |
Financial impact: | On Completion, TCS and TCE will be deconsolidated |
from the Group's financial statements resulting in a | |
decrease in the Company's net assets (approximately | |
HK$440 million) and the non-controlling interest in | |
respect of the Phataraprasit Shareholders' interest in | |
HSH-SCH (approximately HK$340 million) will be | |
eliminated. Excluding the related restructuring and | |
transaction costs, the Transaction will result in a negative | |
equity movement of approximately HK$650 million | |
based on existing book value of The Peninsula Bangkok | |
and its surrounding land, before taking into account any | |
assessment of the market values or redevelopment | |
potential of the same. |
Upon Completion, HSH-SCH shall become an indirect wholly-owned limited liability subsidiary of the Company, and the financial results, assets and liabilities of HSH-SCH shall continue to be consolidated into the financial statements of the Group. In addition, TCS and TCE shall cease to be subsidiaries of the Company, and the financial results, assets and liabilities of TCS and TCE shall cease to be consolidated into the financial statements of the Group.
As the applicable percentage ratio of the Transaction under Chapter 14 of the Listing Rules is 5% or more, but less than 25%, the Transaction constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules.
Reasons for the restructuring and Transaction
Prior to the restructuring, the Company, through its subsidiaries, and the Phataraprasit Shareholders had entered into 50/50 joint venture arrangements in HSH-SCH to own and for the Company to manage The Peninsula Bangkok and the Thai Country Club.
Upon Completion, the Company will (i) assume full responsibility and control over the development, management and future operations of The Peninsula Bangkok and its surrounding land, as well as be entitled to the profits and assume the liabilities and expenses of the hotel and its surrounding land; and (ii) cease to have any responsibility over the development, management and future operations of the Thai Country Club and TCC Land Parcels. The restructuring is in line with the Company's principal business of hotel ownership and management and reflects the desire of the Company and the Phataraprasit Shareholders
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The Hongkong and Shanghai Hotels Ltd. published this content on 28 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 August 2020 04:32:09 UTC