Ascendas Hospitality Trust to sell Pullman Cairns International for A$75.08m

ASCENDAS Hospitality Trust (A-HTrust) announced on Friday it had entered into a put and call option deed for the sale of its 50 per cent owned hotel, Pullman Cairns International, with Shakespeare Property Group, which will purchase the property at a cash consideration of A$75.08 million (S$79.9 million).

The divestment is expected to be completed by June 30, 2015.

A-HTrust is expected to recognise approximately S$3.4 million representing its 50 per cent share of profits from the divestment. Meanwhile, net proceeds attributable to A-HTrust after deducting fees and expenses incurred in relation to the divestment are approximately A$20.2 million.

A portion of the net proceeds from the divestment will be used to repay existing loans, and the balance may be used for pursuing asset enhancement opportunities and future acquisitions as and when appropriate, the trust said.

It added that the managers also intend to distribute up to S$2 million to stapled security holders in the financial year ending March 31, 2016.

Based on the valuations from Savills Valuation, an independent property valuer commissioned by the trust's managers, Pullman Cairns International is valued at A$67 million as at March 31, 2015. The consideration represents a premium of 12.1 per cent to the hotel's latest valuation.

Under the terms of the put and call option deed, the purchaser is granted a call option by the vendors to purchase the hotel and the vendors are granted a put option to require the purchaser to purchase the hotel.

The call option exercise period is 30 days from the commencement date of the put and call option deed.

In the event that the call option is not exercised during the call option exercise period, the put option exercise period will commence on the day after the expiry of the call option period and will continue for a period of five days.