PETALING JAYA: BERJAYA LAND BHD (BLand), the property arm of tycoon Tan Sri Vincent Tan Chee Yioun’s flagship Berjaya Corp Bhd, has acquired a 75% stake in a hotel operator in Iceland for US$53.63mil (RM222.03mil).
BLand, in a statement, said wholly owned unit Berjaya Property Ireland Ltd (BPIL) had entered into a deal on July 13 to buy the controlling stake in Icelandair Hotels ehf for US$53.63mil cash (RM222mil).
Icelandair Hotels currently operates 20 hotels located all around Iceland with a total of 1,811 rooms.
In addition, a new five-star, 145-room hotel developed in collaboration with Hilton Hotels is scheduled to be launched in Reykjavik’s Parliament district in 2020.
BLand said the total earnings before interest, taxation, depreciation and amortisation of these hotels was about US$12mil for the financial year ended Dec 31, 2018.
Total revenue in 2018 was US$97mil.
“I am very pleased with this investment, which is at a low entry cost, with an average cost/price of about US$75,096 per room,” Tan said in the statement.
Icelandair will hold the 25% stake for a minimum of three years. The agreement includes a put and call option on the remaining 25% stake, which will allow BPIL to eventually own a 100% equity interest.
The deal also includes a restructuring of Icelandair Hotels that involves the refinancing of debts.
The completion of the transaction is set to be by the end of this year, subject to the fulfillment of conditions by both parties.
“The Icelandair Hotels is one of the largest hotel chains in Iceland, and its hotels are operated at a very high standard by a passionate and dedicated team. We are delighted to add this hotel group to our growing network of hotels and resorts,” Tan said.
Besides increasing Berjaya’s presence in the European region, this acquisition also increases the room inventory of the Berjaya group of hotels from about 4,200 to 6,011 rooms, with an additional 1,811 rooms. Currently, the Berjaya group of hotels is operating under the Berjaya Hotels and Resorts, Four Seasons and Sheraton brands in Europe and Asia.
The group’s current portfolio of 19 city and resort hotels are located in Malaysia, Vietnam, the Philippines, Japan, Sri Lanka, the Seychelles and the United Kingdom.