Banyan Tree Acquires Stakes in Two Resort Investment and Development Companies for S$5.5 Million

Banyan Tree Acquires Stakes in Two Resort Investment and Development Companies

[Singapore] Hospitality group Banyan Tree announced on Friday (Mar 14) that its indirect subsidiary, Laguna Resorts & Hotels Public Company, has acquired stakes in two resort investment and development companies from NSL Resorts International for S$5.5 million.

Acquisition Details

Laguna Banyan Tree acquired an additional 39.2 per cent of Tropical Resorts, a Hong Kong-incorporated corporation in the business of resort investment and development, for a total consideration of S$3.2 million. This brings Laguna Banyan Tree’s interest in Tropical Resorts to 65.1 per cent, from 25.9 per cent. Post-acquisition, Tropical Resorts is now an indirect subsidiary of Banyan Tree.

In addition, Laguna Banyan Tree acquired 13.5 per cent of Donvale, a corporation incorporated in the British Virgin Islands that engages in resort investment and development activities, for a consideration of S$2.3 million. NSL Resorts International owned a 39.2 per cent stake in Tropical Resorts and 13.5 per cent stake in Donvale, respectively.

Rationale for the Acquisitions

Banyan Tree believes the share acquisitions will benefit the overall group, leading to an increase in Laguna Resorts & Hotels Public Company’s offshore resort investments and development portfolio.

Financing

The aggregate consideration of S$5.5 million was paid in cash, which was funded by internal resources. The amount was determined following arm’s length negotiations between Laguna Banyan Tree and NSL Resorts International, which considered factors such as historical operating performance, existing market conditions, and liquidity of Tropical Resorts and Donvale.

Deed of Assignment

Laguna Banyan Tree and NSL Resorts International entered a deed of assignment, where the former was assigned an existing non-interest bearing loan – owed by Donvale to NSL Resorts International – for a nominal consideration of S$1. The principal amount of the loan is approximately S$989,000.

Impact on Banyan Tree’s Financials

The share acquisitions are not expected to result in any material impact on Banyan Tree’s consolidated net tangible assets per share or consolidated earnings per share for the current financial year.

Conclusion

The acquisitions are a strategic move by Banyan Tree to expand its offshore resort investments and development portfolio, strengthening its position in the hospitality industry.

FAQs

Q: What is the purpose of the acquisitions?
A: The acquisitions are aimed at expanding Banyan Tree’s offshore resort investments and development portfolio.

Q: Who acquired the stakes in Tropical Resorts and Donvale?
A: Laguna Banyan Tree, an indirect subsidiary of Banyan Tree, acquired the stakes.

Q: What is the total consideration for the acquisitions?
A: The total consideration is S$5.5 million.

Q: How was the consideration for the acquisitions determined?
A: The consideration was determined following arm’s length negotiations between Laguna Banyan Tree and NSL Resorts International, considering factors such as historical operating performance, existing market conditions, and liquidity of Tropical Resorts and Donvale.