Overseas Union Enterprises (OUE) said it plans to buy LCH Hotels, which owns the 320-room Crowne Plaza Changi Airport, for S$224.5 million.
OUE will also settle a shareholder loan as well as debt of S$68.5 million.
It said the proposed acquisition will expand the earnings base of the company’s portfolio of hospitality assets, particularly in light of the group’s competitive presence in Singapore’s robust hospitality landscape.
Other hotels under OUE’s umbrella include the Mandarin Orchard.
OUE said its purchase will be funded entirely through a combination of existing cash resources and banking and debt facilities.
It added that the deal was arrived at an after arm’s length negotiations and on a willing buyer willing seller basis, taking into account the market value of the property.
Indonesia’s Lippo Group took control of OUE last year after buying out its partner Malaysian billionaire Ananda Krishnan, in a deal was valued at US$684 million
The four-star Crowne Plaza hotel was put up for tender in the first week of April by Jones Lang LaSalle.
It sits on a 77-year leasehold plot of land between Changi Airport’s Terminal 3 and Terminal 1, and is the airport’s first and only stand-alone hotel.
The nine-storey building was designed by award-winning architectural firm Woha.
It is connected to Terminal 3 and has a swimming pool, restaurants, conference rooms, spa lounges and a health and fitness club.
The hotel opened in 2009 and was built for S$92 million, targeting air travellers with short stopovers, as well as corporate travellers involved in businesses or meetings near the airport
The Civil Aviation Authority of Singapore collects a base rent of S$250,000 a year plus a percentage of revenue from the current owners.
Source : Channel NewsAsia – 15 Apr 2011