Zhitong Financial APP News, Huada Hotel (00201), Shunhao property (00219) and Shunhao Holdings (00253) jointly announced that on May 11, 2022, the buyer (Shunhao Construction (Holdings) Limited, a direct wholly-owned subsidiary of Huada Hotel) entered into a sale and purchase agreement with the sellers Crest Incorporated and Deng Yaosheng (as guarantors of the seller's obligations).
The Purchaser has agreed to acquire the Sale shares (the entire issued share capital of the Target Company Haili Investment Limited) and the transferable sales loan (the total outstanding amount owed by the Target Company to the seller at the time of completion will be transferred from the seller to the Purchaser on completion, the amount will be approximately HK $436 million on 31 December 2021) at a consideration of approximately HK $1.421 billion (which can be adjusted). After adjustment, the buyer expects that the maximum price payable will not exceed HK $1.44 billion. The target company is the sole legal and beneficial owner of the property. Tang Yiu-sheng has agreed to guarantee the seller's obligations under the Sale and purchase Agreement.
The property, located at 123 Castle Peak Road, Ting Kau, Tsuen Wan, New Territories, Hong Kong, operates a hotel called Ting Lan Ju. The total floor area of the hotel is about 216300 square feet. The property includes a 16-storey (including three-storey basement) hotel with 435 rooms, a restaurant, a swimming pool and a gym. The property is held under a government lease for the period from September 8, 1992 to June 30, 2047, and the current rent payable is 3% of the total operating income of the target company each year.
The target company is a limited company incorporated in Hong Kong and is wholly owned by the seller. The main business of the target company is investment holding, which is the sole legal and beneficial owner of the property.
The seller is a limited company incorporated in the British Virgin Islands. The main business of the seller is investment holding.
The buyer is a limited company incorporated in Hong Kong and is a direct wholly-owned subsidiary of Huada Hotel. The main business of the buyer is investment holding.
According to the announcement, the acquisition is a good opportunity for these companies (Huada Hotel, Shunhao property and Shunhao Holdings) to expand their existing hotel management services and hotel management portfolio; increase their revenue sources; and enhance their profitability.
The property was valued at HK $2.46 billion on December 15, 2021, and after adjustment, the buyer expects the maximum price payable to be no more than HK $1.44 billion. The group will be able to acquire the property in a prime location in Hong Kong at a price well below the market price.