This article first appeared in The Edge Financial Daily on April 19, 2018

KUALA LUMPUR: Keck Seng (Malaysia) Bhd is close to acquiring a stake in Luxembourg-based AccorInvest Group SA, boasting a portfolio of 891 hotels in the economy and in the mid-scale segment — a 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  a 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 by the company 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 yesterday, Keck Seng said its wholly-owned subsidiary Brosna Ltd 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 AccorInvest shares.

A2I’s objective is to acquire AccorInvest shares. It is raising funds from various investors by issuing shares and TPECs.