ICP eyes 5% stake in proposed 10.65b yen Osaka hotel deal

ICP is looking to acquire a 5 per cent trust-beneficiary interest in the b Osaka Midosuji Hotel in Japan, the Catalist-listed firm said on Thursday evening.

ICP's share of the purchase price is about 532.5 million yen (S$6.9 million). Its total estimated acquisition cost will be 543.3 million yen after including professional fees and transaction costs. This will be funded by internal resources and bank borrowings, ICP said.

The other 95 per cent stake will be taken by Plenitude Osaka, which has signed a joint venture (JV) agreement with ICP to undertake the acquisition.

The JV company, MHI SG 1, will fork out 10.65 billion yen (S$138.2 million) to acquire the hotel. The total purchase price is at a 24 per cent discount to the 14 billion yen independent valuation of the property as at Nov 24.

Plenitude Osaka is a subsidiary of Malaysia-listed hospitality business Plenitude Berhad. Meanwhile, the seller of the b Osaka Midosuji Hotel is Japan-listed property developer Tokyo Tatemono.

ICP subsidiary Travelodge Hotels (Asia) will manage the hotel after the deal is completed. This will allow Travelodge to establish its brand in Japan, diversify its operations into a new market and gain foothold in the gateway city of Osaka, said ICP.

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The 306-room-hotel commenced operations in May 2019. It has 21 storeys plus a basement level, with facilities such as a food and beverage outlet, a retail space and a car park currently leased to third parties.

It is located in the Honmachi district, near the central business district as well as the Dotonbori leisure and entertainment precinct. It is also within walking distance to the Honmachi and Shinsaibashi subway station, ICP said.

Shares of ICP, which is in the business of hotel management, vessels investment and chartering, were trading flat as at the midday break on Friday.