KepLand divests Myanmar hotel for US$41m

Singapore

DEVELOPER Keppel Land (KepLand) is divesting its full stake in Wiseland Investment (Myanmar) to Myanmar-based hospitality group Eden Hotels and Resort Co for US$41 million.

Wiseland Investment owns and operates the 250-room Sedona Hotel Mandalay. Situated in the heart of the city, the hotel opened its doors in 1997 and spans a site of four acres.

The divestment is in line with the company's strategy to recycle capital for higher returns, parent Keppel Corp highlighted in a release to Singapore Exchange. Wiseland Investment entered into a conditional sales and purchase agreement (SPA) with Eden Hotels on Wednesday, it added.

This comes on the heels of a joint venture agreement inked by KepLand last month with Burmese conglomerate Shwe Taung Group to develop premium serviced residences and offices in the next phase of Junction City in Yangon. KepLand's investment in that phase of the mixed-use development is to the tune of US$48.6 million.

The deal with Eden Hotels is contingent on 24 per cent of the US$41 million acquisition price being paid within five business days from the SPA and another 10 per cent on the date of completion of the SPA. One per cent was paid on March 26 this year. The remaining 65 per cent will be paid in two tranches over a 15-month period.

The purchase price took into account the future prospects and fair value of the property owned by Wiseland.

As at June 30, 2016, the book value of the sale shares amounting to 1,085 ordinary shares and shareholders' loan was about S$12.2 million.

Ng Ooi Hooi, president (regional investments), Keppel Land, said: "The divestment will unlock value in Sedona Hotel Mandalay for Keppel Land and enable us to pursue other opportunities in Myanmar, with a focus on Yangon. We are confident of the long- term potential of Myanmar and are committed to participating in and contributing to the growth of the country."

KepLand made its first foray into Myanmar in 1993 when it broke ground for Sedona Hotel Yangon, before breaking ground for its second Sedona hotel in Mandalay a year later.

The chairman of the Eden group, Chit Khine, added: "Sedona Hotel Mandalay is a well-established property in Myanmar. We are confident that this acquisition will pave the way for further development of the hospitality industry in the Mandalay region."

Shares in Keppel Corp closed at S$5.39 on Wednesday, up eight cents.

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