Ascendas Hospitality Trust to sell off stake in Queensland hotel for A$75.08 million

SINGAPORE - Ascendas Hospitality Trust (A-HTrust) announced on Friday that it has entered into a put and call option for the sale of its 50 per cent stake in a hotel in Queensland, Australia, to Shakespeare Property Group for A$75.08 million (S$79.9 million) in cash.

The divestment of Pullman Cairns International is expected to be completed by June 30, 2015.

The upscale hotel, was valued at approximately A$70.8 million by independent property valuer Savills as at March 31 this year.

The trust said the divestment is in line with its strategy to recycle its capital for more productive purposes.

Said Mr Tan Juay Hiang, chief executive officer of the trust managers: "The divestment of Pullman Cairns International, the only hotel in A-HTrust's portfolio that is not wholly-owned, is consistent with our proactive approach in managing and evaluating asset plans for the portfolio.

"Given its location in one of the smaller cities in Australia, which is predominantly a vacation destination, Pullman Cairns International does not entirely fit into the profile of A-HTrust's portfolio. This was a key factor for the divestment."

A-HTrust is expected to recognise approximately $3.4 million representing its 50 per cent share of profits from the divestment. Meanwhile, net proceeds attributable to A-HTrust after deducting fees and expenses incurred in relation to the divestment are approximately A$20.2 million.

A portion of the net proceeds from the divestment will be used to repay existing loans, and the balance may be used for pursuing asset enhancement opportunities and future acquisitions as and when appropriate, the trust said.

Managers also intend to distribute up to $2 million to stapled security holders in the financial year ending March 31, 2016.

Under the terms of the put and call option deed, the purchaser is granted a call option by the vendors to purchase the hotel and the vendors are granted a put option to require the purchaser to purchase the hotel.

The call option exercise period is 30 days from the commencement date of the put and call option deed.

In the event that the call option is not exercised during the call option exercise period, the put option exercise period will commence on the day after the expiry of the call option period and will continue for a period of five days.

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