THE Straits Trading Company (STC) and Far East Organization are tying up for a stronger presence within Asia’s hospitality scene, with the setting up of a joint venture company.
In a statement issued yesterday, STC announced that it had signed a joint venture implementation agreement with Far East Orchard (FEOrchard), a listed arm of Far East Organization, to pursue and conduct hospitality management and hospitality-related businesses as well as invest in real estate used primarily for hospitality purposes and hospitality-related assets.
Under the agreement, STC will hold a 30 per cent stake and contribute Rendezvous Grand Hotel Melbourne, Rendezvous Hotel Perth and Rendezvous Studio Hotel Perth Central, as well as 13 hotel management contracts under Rendezvous Hotels International to the new Far East Hospitality Holdings. STC will receive net cash of S$56.2 million (US$45.4 million).
FEOrchard will take the remaining 70 per cent stake and bring to the table 25 hotel and serviced residence management agreements and also S$97 million.
STC chairman, Chew Gek Khim, said: “The combination of FEOrchard’s operational expertise and STC’s strong hotel presence in Australia and New Zealand through its Rendezvous hotels will create a formidable hospitality joint venture, which we plan to expand in their respective and new markets.”
The JV company will become one of the largest hotel operations in Asia-Pacific, kicking off with over 6,000 rooms under its management.
Separately, STC has also agreed to sell off Rendezvous Grand Hotel Singapore and Redezvous Gallery to Far East Hospitality Trust (FEHT) and Serene Land, a member of the Far East Organization group of companies.
The properties changed hands for S$285 million, with S$217 million in cash and S$68 million in FEHT stapled securities.
The two firms had earlier announced their intentions to collaborate late last year (TTG Asia e-Daily, November 28, 2012).
