Qatar SWF snaps up top Singapore hotel
US$847m tab will also give Qatari Diar 40% stake in Fairmont Raffles
By UMA SHANKARI
(SINGAPORE) Qatar's sovereign wealth fund Qatari Diar has acquired a 40 per cent stake in luxury hotel chain Fairmont Raffles in a US$847 million deal that will also see it take ownership of one of the chain's Singaporean hotels.
Fairmont Raffles declined to name the hotel that is being sold. The group owns three hotels in Singapore: Raffles Hotel, Fairmont Singapore and Swissotel The Stamford. Market watchers said that Raffles Hotel, which is more than 120 years old and gazetted as a national monument, and Swissotel have both been on the market for potential buyers over the past months.
The purchase by Qatari Diar means that Kingdom Holding, the investment company controlled by Saudi billionaire Prince Alwaleed bin Talal bin Abdul Aziz Al Saud, has relinquished its controlling stake in Fairmont Raffles.
Toronto-based Fairmont Raffles on Monday said that it will sell new shares equivalent to 40 per cent of its capital to Cayman Islands-based Voyager Partners, a private investment company that is an affiliate of Qatari Diar. This will net the unlisted hotelier some US$467 million.
It will also earn another US$275 million from the sale of the unspecified hotel in Singapore and gain US$105 million in promised management contracts.
The proceeds will be used to fund the global expansion of Fairmont Raffles, which has about 100 hotels operating under three brands: Fairmont, Raffles and Swissotel.
The deals also aligns Fairmont Raffles with cash-rich investors in the hotel property sector amid plans to take the company public in two to three years.
Fairmont Raffles chief executive William Fatt said that all of the sale proceeds will go to Fairmont Raffles, which plans to expand with hotel projects in markets such as China and Saudi Arabia. The group is eyeing revenue growth of up to 30 per cent over the next few years.
Once the new shares are issued, Qatari Diar - which is controlled by the Qatar Investment Authority, the sovereign wealth fund which bought into the German car maker Porsche last year - will become the biggest shareholder in the hotel company.
This means that private Saudi investment firm Kingdom Holding will see its stake in the unlisted hotelier diluted to 35 per cent from 58 per cent. The company is 95 per cent owned by Prince Alwaleed, who in 2006 teamed up with US-based Colony Capital in a US$3.9 billion deal to buy Fairmont Hotels and Resorts Inc. The deal created Fairmont Raffles, an international luxury chain with 120 hotels in 24 countries.
Kingdom Holding will become the second-largest shareholder, followed by Colony Capital, which will own around 22 per cent.
Teaming with Qatari Diar, which owns hotels, will boost Fairmont Raffles' management business, Prince Alwaleed said in an interview with Bloomberg Television.
'They will supply us with a maximum number of hotels that will add to our income stream,' he said. 'Consequently when we go public, hopefully in the next two to three years, this will add dramatic value to us.'
Mr Fatt said that any future public offer will take place outside of Saudi Arabia. Asia is the largest area of growth for Fairmont Raffles, followed by the Middle East and Europe.
Riyadh-based Kingdom Holding is consolidating its business by selling stakes in some of its interests and taking full control of others. News Corp in February agreed to buy a 9.1 per cent stake in Prince Alwaleed's Rotana Group and Kingdom Holding on March 15 offered to purchase the rest of the shares in Kingdom Hotel Investments.
Copyright © 2010 Singapore Press Holdings Ltd. All rights reserved.
Which will it be? Fairmont Raffles is keeping mum on which of the three hotels in the chain - (from above) Swissotel The Stamford, Raffles Hotel and Fairmont Singapore - it will own
Posts
No comments:
Post a Comment