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Berjaya Land proposes to take control of hotel operator in Iceland

Last update: 15/07/2019

KUALA LUMPUR, July 15 (Bernama) -- Berjaya Land Bhd (BLand), through wholly-owned subsidiary Berjaya Property Ireland Limited (BPIL), has proposed to acquire a 75 per cent stake in hotel operator Icelandair Hotels ehf for US$53.63 million (about RM220 million).

In a filing with Bursa Malaysia today, BLand said BPIL entered into an agreement with Icelandair Group hf to acquire the stake on Saturday.

The Icelandair Hotels group has 20 hotels with 1,811 rooms in Iceland and is developing a new five-star hotel in Reykjavik's Parliament district in collaboration with Hilton Hotels. The 145-room hotel is scheduled to be launched in 2020.

BLand said Icelandair Hotels was undergoing an internal restructuring exercise whereby the group would acquire 100 per cent of Hljomalindarreitur ehf and certain hotels and real estate assets in Iceland.

Under this proposed pre-closing restructuring, the Icelandair Hotels group will have its debts refinanced and it will be granted loans totalling US$64 million to US$72 million (RM263 million to RM296 million).

BPIL, which signed two additional agreements with Icelandair Group hf on Saturday, may eventually own 100 per cent in the restructured Icelandair Hotels group on the exercise of a put or call option. However, the remaining 25 per cent stake can only tbe acquired three years or more after the completion of the current acquisition exercise.

BLand said the proposed acquisition was in line with the group’s plans for geographical diversification and revenue expansion.

“The luxury hotel segment in Iceland is expected to grow and the proposed acquisition will enable the BLand Group to enter this segment with strategically located hotels in the heart of Iceland as well as certain hotels being operated under the Hilton brand name,” it said.

The proposed purchase will not have a material effect on the net assets and earnings of the BLand group for the current financial year ending June 30, 2020, but is expected to contribute positively to its future earnings.

The proposed acquisition was expected to be completed during this financial yearr, the company said.

-- BERNAMA