Far East Hospitality And Straits Trading Forms Strageic Alliance To Grow Rendezvous Hotel Hospitality Business In Asia-Pacific

2012-11-30 — /travelprnews.com/ — The Straits Trading Company Limited (STC) has signed a Memoranda of Understanding (MOUs) with members of the Far East Organisation (FEO) Group, setting the framework for a strategic alliance in the hospitality sector.

Under the MOUs, STC entities, including its hospitality arm Rendezvous Hospitality Group (STC Group), will enter into agreements with FEO’s listed entities, Far East Orchard Limited (FE Orchard) and Far East Hospitality Trust (Far East H-Trust), as part of an overall strategy to create sustainable platforms for growth and value creation, both in Singapore and the Asia Pacific region.

The strategic alliance encompasses the following:

I. The formation of a joint venture asset ownership group, to be owned on a 50% – 50% basis between the STC Group and FE Orchard, which will initially hold STC Group’s three owned hotels in Australia, together with a cash payment by FE Orchard to STC;

II. The creation of a merged hospitality management company, to be owned on a 20% – 80% basis between the STC Group and FE Orchard, through the combination of the two Groups’ existing hospitality operations, together with a cash payment by STC to FE Orchard;

III. The injection of Rendezvous Grand Hotel Singapore and Rendezvous Gallery Singapore into Far East H-Trust, all of whose hospitality assets will then be managed by the merged hospitality management company.

Implementation of the transactions envisaged under the MOUs will result in the creation of sustainable and scalable platforms for growth, bringing together two of Singapore’s leading hospitality operators, who will be well-positioned to grow and strengthen the Rendezvous brand in Singapore, Australia and the Asia Pacific.

STC remains committed to its hospitality arm and its outstanding projects. Last year, RHG announced an STC-supported, multi-million dollar rebranding initiative uniting Rendezvous Hotels and Marque Hotels into one Rendezvous brand. As part of this initiative, many of the Hotels have undergone extensive refurbishment, including the Rendezvous Hotel Perth (soon to be renamed Rendezvous Grand Hotel Perth Scarborough) and the Rendezvous Grand Hotel Melbourne, which will celebrate its 100th anniversary in early 2013.

This strategic alliance represents another progressive step in the transformation of STC into a holding company with stakes in businesses that are focused players in their chosen fields.

Mr Eric Teng, Straits Trading’s Chief Executive Officer (Property & Hospitality) said: “I have always advised that we shall transform Rendezvous – with strategic partners – to leverage and scale the Straits Trading Company investment in the hospitality industry. By providing sustainable platforms for growth and value-creation both in Singapore and the Asia Pacific region, this impending partnership would mean more new business development and career opportunities for our staff.”

As of the date of this announcement, no definitive or binding agreements have been entered into or reached by any of the STC Group in respect of the transactions contemplated by the MOUs. There is no assurance or certainty that such agreements will be entered into or reached or that such transactions will be proceeded with. In addition, entry into such transactions is currently pending, inter alia, the satisfactory conduct of due diligence and may, depending on how each transaction is finally structured, be subject to the receipt of various approvals and the satisfaction of various conditions.

If the above transactions are proceeded with, definitive agreements are expected to be entered into after the financial year of STC, ending 31 December 2012 (FY 2012) and, accordingly, such transactions are not expected to have any material effect on the net tangible assets per share or the earnings per share of STC and its subsidiaries for FY 2012.

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