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UOL Group sells Pan Pacific Suzhou unit, will continue to run hotel
UOL Group is selling China unit Suzhou Wugong Hotel Co (SWHC), which owns the Pan Pacific Suzhou hotel, it announced on Friday.
"Prior to completion, the company's hospitality arm, Pan Pacific Hotels Group, will enter into a hotel management agreement with the purchaser to continue to operate the hotel as Pan Pacific Suzhou," said UOL.
UOL's indirect wholly-owned subsidiary Hotel Investments (Suzhou) has entered into a conditional sale-and-purchase agreement to sell its entire interest in SWHC to Bao Chang Long (Beijing) Commercial Management Co for a total net cash consideration of 408 million yuan (S$80 million).
SWHC owns the 480-room Pan Pacific Suzhou hotel and eight apartment units in Suzhou that are used as staff quarters. Upon completion of the deal, SWHC will cease to be a UOL subsidiary.
The consideration was arrived at on a willing-buyer and willing-seller basis, taking into account the value of SWHC's hotel, its other assets, and the hotel's unexpired leasehold term of about 25 years, said UOL.
Under the agreement, the purchaser shall pay an amount equal to 20 per cent of the consideration, less a deposit of 8.68 million yuan that has been paid. The rest shall be payable by completion of the transaction, scheduled to take place about three months from the date of the agreement.
The transaction is not expected to have a material effect on UOL's net tangible assets per share and earnings per share for the current financial year ending Dec 31, 2019.
UOL shares closed down six Singapore cents or 0.83 per cent at S$7.18 on Friday before the news.