A SUBSIDIARY of Asia-Pacific Strategic Investment : 5RA 0% (AP Strategic) is looking to sell its stake in a China hotel management company, hotel and its related assets for 80 million yuan (S$15.6 million).

The subsidiary, Grand Canal Culture Tourism Group, which is 78.5 per cent-owned by AP Strategic, expects net proceeds of 70.4 million yuan from the transaction, after deducting estimated taxes, professional fees and other costs.

It plans to use a majority of proceeds from the proposed disposal to repay term loans, including AP Strategic’s. The remaining will be used for the settlement of existing trade and other creditors, as well as for general working capital purposes.

As part of the deal, it will transfer some six million yuan in claims against the hotel management company, Zhejiang Zhongfang Yashe Hotel Management, to the interested buyer Huzhou Hongji Enterprise Management.

The hotel, Anatole by Landison Hotel Huzhou, has 113 rooms and is located in the town of Hefu, Huzhou, in the Zhejiang province of China. It sits on a land plot spanning 10,638 square metres (sq m), with a building area of 15,649.84 sq m and a lease term expiring on Oct 18, 2056.

The land plot has a carrying value of S$15.5 million as at Jun 30, 2022, and has been pledged as collateral to secure Grand Canal’s banking facilities, which amount to 28.8 million yuan.

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The deal is subject to shareholder approval, which will be sought at an extraordinary general meeting to be convened.

Following the announcement, AP Strategic has lifted its trading suspension called on Dec 21, 2022, days after it called for a trading halt on Dec 16. The counter last traded at S$0.001 on Dec 9.