Chip Eng Seng in JV to provide hospitality management services

CHIP Eng Seng's wholly owned subsidiary CES Hospitality (CESH) has entered a joint venture (JV) with hospitality management business Ariva Hospitality to provide management services to hotels and serviced residences.

Ariva is an indirect wholly-owned subsidiary of Tang Dynasty, a company owned by Gordon Tang and Celine Tang - Chip Eng Seng's controlling shareholders - and Gordon Tang's mother Yang Chanzhen.

CESH is currently the sole shareholder of the JV company, CES-Ariva Hospitality, having contributed S$350,000 to the JV. Ariva will contribute S$150,000 to the JV within 30 days of the agreement, resulting in Ariva having a 30 per cent shareholding and CESH owning 70 per cent.

CESH and Ariva have agreed to collectively provide the JV company with a loan facility of up to S$10 million, according to their respective shareholding in the company.

CES-Ariva will pay CESH a fixed monthly fee for corporate services that includes administrative support, accounting, human resources and information technology.

Chip Eng Seng said providing management services is an "asset-light strategy which will broaden the income stream and increase recurring income for the group".

The group has been exploring ways to broaden its hospitality portfolio by acquiring assets and building up capability to provide management services to hotels and serviced residences, it said in a bourse filing on Monday (Jan 31).

Ariva is incorporated in Singapore. Together with its subsidiaries, the company provides management services for serviced residences in Singapore, Malaysia and Thailand.

Residences include Ariva on Shan Serviced Residences in Singapore, Ariva Trillion Residences in Malaysia, and Ariva Ivy Servizio Thonglor, Ariva Sukhumvit 11 and Ariva C Ekkamai in Thailand.

The counter closed at S$0.43 on Monday, up S$0.005 or 1.18 per cent.