Hotel Properties' associated firm buys Tuscany site for some 22.6m euros

PROPERTY firm Hotel Properties Limited (HPL) on Monday said that its associated company plans to buy for an estimated 22.6 million euros (S$35.4 million) the freehold interest of a 740-acre site in Tuscany, Italy that is occupied by a five-star hotel and a fully consecrated chapel.

The purchase of the site was made through buying up the entire corporate capital and voting rights of Castello del Nero, a company incorporated in Italy. This was done via a wholly owned unit of Leisure Ventures, in turn an associated company of HPL. 

Ong Beng Seng, the managing director and the deemed controlling shareholder of HPL, is deemed to be interested in the balance 50 per cent of interest in Leisure Ventures. 

The final purchase price will be adjusted once the company accounts for the net working capital available in Castello del Nero. The wholly owned unit of Leisure Ventures will also discharge the entire indebtedness of Castello of 16.9 million euros. To discharge debt means that the debtor is no longer legally required to make payment for the loans. 

This purchase by HPL will be funded through loans and internal resources. 

The site also includes a separate 12-apartment agro-tourism accommodation, vineyards and olive trees producing grapes and olive oil for sale, as well as five additional residences that comes with consent for refurbishment into independent villas. 

The company said that the deal will allow HPL to further diversify its hotel portfolio geographically, and will "leverage on the wealth of experience of Ong Beng Seng and associates in hotel investment, as well as to share the investment risks".

Shares of HPL closed unchanged at S$3.62 on Monday.