SINGAPORE (Jan 24): Banyan Tree Holdings and China Vanke Co have agreed to create Banyan Tree China (BTC), a new joint venture between Banyan Tree and Vanke, to consolidate the ownership of Banyan Tree-branded hotels and assets in China.
The amount of initial paid-up capital of BTC is estimated to be no more than RMB2 billion (RM1.29 billion).
BTC will also be the development and management platform for new projects by both parties in hospitality, senior-living and wellness.
BTC will initially be controlled 50:50 by Banyan Tree and Vanke through the injection by Banyan Tree of all its China-owned assets into BTC at valuation, which is to be confirmed by an independent valuation methodology.
The current book value of these assets (before valuation) is RMB720 million. BTC will at its discretion invite owners of the other 15-plus existing hotels and 20-plus hotels bearing various Banyan Tree brands under development in China to inject their hotels into BTC under mutual agreement.
Vanke may also inject hotels it owns as well as future hotels under development into BTC.
BTC will also own 40% of Banyan Tree’s hotel management company in China and continue the rapid expansion of the various brands under the Banyan Tree Group namely Banyan Tree, Angsana, Cassia, Dhawa and Laguna.
Vanke will also take up 5% equity stake in Banyan Tree itself, as did AccorHotels, another strategic partner with which Banyan Tree recently signed a collaboration agreement to co-develop Banyan Tree-branded hotels around the world.
Yu Liang, President of China Vanke, said: “Vanke is not only one of the largest real estate developers in China, but also one with a reputation for integrity, quality and innovation… We have over nine million homeowners who keep in close touch with us, and they will be a big market for Banyan Tree hotels. We have many mixed-use urban projects which could take on a Cassia or Dhawa. And we also have many senior-living and active-ageing projects where Banyan Tree’s award-winning wellness experience can provide new joint opportunities.”
Shares of Banyan Tree yesterday closed 1 Singapore cent higher at 48 Singapore cents. — theedgemarkets.com.sg