Far East Orchard inks hospitality deal with Straits Trading Company

Looking into acquisition of 50% interest.

According to a release, Far East Orchard Limited has signed a non-binding memorandum of understanding (MOU) with The Straits Trading Company Limited to explore the proposed acquisition of STC’s entire hospitality management business (which includes the trade mark rights to the “Rendezvous” and “Marque” brands).

STC’s hospitality management business currently operates hotels in Singapore, Australia, New Zealand and China. As part of the proposed transaction, STC will have the right to subscribe up to 20% of the share capital of the enlarged hospitality management company of FEOrchard.

Under the MOU, FEOrchard will also be exploring a proposed acquisition from STC and/or its subsidiaries of a 50% interest in three hotels in Australia, namely Rendezvous Studio Hotel Perth Central, Rendezvous Grand Hotel Melbourne and Rendezvous Hotel Perth.

Commenting on the MOU, FEOrchard’s Group Chief Executive Officer and Managing Director, Mr Lucas Chow said: “We are pleased to announce the signing of our first MOU since the EGM in July, where we received strong endorsement from our shareholders supporting our restructuring. If the Proposed Transactions are to proceed, it will allow FEOrchard to grow our hospitality management business beyond Singapore and also create a platform to operate a portfolio of third party hospitality assets.

This expanded portfolio will consist of more than 30 hotels and service residences under 5 distinct brands and more than 6,000 rooms under management with a regional footprint across Australia, New Zealand, China, Malaysia and Singapore.”

The Company is currently evaluating the Proposed Transactions and the structure of the Proposed Transactions. The Proposed Transactions are also subject to satisfactory due diligence, relevant valuations being carried out, the receipt of the requisite approvals, and definitive agreements being negotiated, finalised and executed by the parties.

As no definitive agreements have been executed yet, there can be no assurance that the Proposed Transactions will proceed. FEOrchard will provide further details in subsequent announcements in accordance with the Listing Rules at the appropriate times.