Thursday 28 Mar 2024
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KUALA LUMPUR (April 18): Keck Seng (Malaysia) Bhd is close to acquiring a stake in Luxembourg-based AccorInvest Group SA, which boasts a portfolio of 891 hotels in the economy and midscale segments — the majority of which are located in Europe.

Keck Seng said an investment in AccorInvest is expected to provide an opportunity for the group to gain exposure to a diversified portfolio of hotels mainly located in Europe with resilient income stream and opportunities for value creation.

AccorInvest is a unit of French hotel operator Accor SA. Of the 891 hotels it has, 324 are owned and 567 are operated under fixed or variable-rent leases. It is the intention of Accor SA to sell a majority stake in AccorInvest to investors.

In a filing with Bursa Malaysia today, Keck Seng said its wholly-owned subsidiary Brosna Ltd had yesterday entered into a subscription agreement with A2I Holdings S.À.R.L to subscribe shares and Tracking Preferred Equity Certificates (TPECs) issued by A2I for €25 million (RM120 million) plus fees.

This follows an equity commitment letter signed on March 9 by Keck Seng to invest in AccorInvest under a special purpose vehicle in which Keck Seng, together with other investors, will acquire the shares of AccorInvest.

The objective of A2I is to acquire the shares of AccorInvest. It is raising funds from various investors by issuing shares and TPECs. As such, the €25 million proceeds received by A2I from Keck Seng's subscriptions will be used to buy part of the shares to be issued by AccorInvest.

Keck Seng said the transaction is to be financed through internal funds.

Barring any unforeseen circumstances, the transaction is expected to be completed in the second quarter of 2018.

Keck Seng executive chairman Ho Kian Guan will also personally invest €5 million (RM24 million) in AccorInvest. Additionally, Hong Kong-listed Keck Seng Investment (HK) Ltd will put in another €25 million into AccorInvest.

Keck Seng shares closed down 3 sen or 0.74% at RM4.03 today, giving it a market capitalisation of RM1.45 billion.

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