29th Sep 2008 11:17
For immediate release 29 September 2008
Millennium & Copthorne Hotels plc ("M&C")
Agreed extension to deadline for completion of the disposal of CDL Hotels (Korea) Limited
M&C announced on 24 June 2008 that CDL Hotels (Labuan) Limited ("the Company") (a wholly-owned subsidiary of M&C) had entered into an agreement ("24 June 2008 Share Purchase Agreement") with Kangho AMC Co. ("Kangho") pursuant to which the Company had agreed to dispose of its 100% holding in the issued share capital in CDL Hotels (Korea) Limited ("the Disposal") for KRW 468.6 billion. The Disposal was subsequently approved by shareholders of M&C at an Extraordinary General Meeting held on 7 August 2008. Completion of the Disposal was originally anticipated to occur by 30 September 2008. However, on 19 September 2008 M&C announced that given the current difficult credit markets, Kangho had asked the Company to grant an extension of the completion date to 30 November 2008 whilst it finalises the terms of its financing arrangements.
The Company and Kangho have agreed the following:
1. the completion date has been amended to 28 November 2008 ("New Completion Date");
2. Kangho shall irrevocably forfeit in favour of the Company any right to repayment of the 10% non-refundable deposit of KRW58 billion (equivalent to approximately £28.8 million1) which Kangho had paid to the Company on 24 June 2008 pursuant to the 24 June 2008 Share Purchase Agreement;
3. Kangho shall pay to the Company an additional non-refundable deposit of KRW1.0 billion (equivalent to approximately £0.47 million2) of which (a) KRW0.5 billion will be paid by Kangho to the Company no later than 24 October 2008 and (b) KRW0.5 billion will be paid by Kangho to the Company no later than 31 October 2008;
4. on the New Completion Date, Kangho shall pay to the Company the remaining KRW410.62 billion (equivalent to approximately £193.4 million2) for the purchase of the shares of CDL Korea, subject to post closing adjustments; and
5. as part of a post closing adjustment payment, Kangho shall pay to the Company KRW9.0 billion (equivalent to approximately £4.24 million2) as reimbursement, inter alia, of costs and expenses incurred by the Company and its related companies in connection with the delay to completion of the Disposal.
Assuming that completion takes place on the New Completion Date, the Company would receive KRW10 billion more than originally contemplated under the 24 June 2008 Share Purchase Agreement.
Enquiries:
Buchanan Communications Tel: +44 (0) 20 7466 5000
Tim Anderson/Charles Ryland/Rebecca Skye Dietrich
Millennium & Copthorne Hotels plc Tel: +44 (0) 20 7872 2444
Adrian Bushnell, Company Secretary
Translated on date of receipt at a Sterling exchange rate of £1 to KRW 2,014.9, being the exchange rate stated in M&C's announcement dated 24 June 2008.
Translated on 26 September 2008 using a Sterling exchange rate of £1 to KRW 2,123.08 .
Related Shares:
Millennium & Copthorne Hotels