27th Sep 2007 13:12
Millennium & Copthorne Hotels PLC27 September 2007 27 September 2007 MILLENNIUM & COPTHORNE HOTELS PLC (THE "COMPANY") The following announcement was released earlier to day by the Company'ssubsidiary, Millennium & Copthorne Hotels New Zealand Limited, which is listedon the New Zealand Stock Exchange. The Company has a 70.2% interest inMillennium & Copthorne New Zealand Limited. Adrian Bushnell 020 7872 2444Company SecretaryMillennium & Copthorne Hotels plc MILLENNIUM & COPTHORNE NEW ZEALAND INVESTS IN JOINT VENTURE WITH GROWING CHINESEPROPERTY DEVELOPER Millennium & Copthorne Hotels New Zealand Limited (NZX: MCK) announced todaythat its Board had approved and entered into a Strategic Cooperation Agreementto invest in a joint venture with a Chinese property developer, Guangdong IdeaValley Group Co., Ltd. ('i-Vale') and its Chief Executive Officer Mr. ZhangBingguan. i-Vale, which is based in one of the fastest growing regions in China,owns a diversified portfolio of real estate assets and related servicescompanies. MCK has partnered with Tai Tak Estates Sdn Bhd ('Tai Tak'), a privateinvestment firm in Singapore and its joint venture partner in Australia (throughKIN Holdings Limited), in this investment. While precise details of this investment were subject to confidentialityagreements, MCK and Tai Tak will each contribute a total of approximatelyUS$32.5 million (approximately NZ$43.7 million) into the joint venture company.MCK and Tai Tak will jointly own a majority (60%) of the joint venture with theshareholders and management team of i-Vale holding the remaining 40% minoritystake. Funding for the investment would be through existing cash resources andno borrowing would be required by MCK to complete this transaction. Theinvestment would be made in tranches when the related conditions precedentincluding approval by and/or registration with the Chinese government for eachphase of completion are fulfilled. Further investment in the joint venture ornew projects may be considered in the future by the parties depending on themerits of each project. Asked why MCK has decided to invest outside Australia and New Zealand, MCKManaging Director Mr. B K Chiu stated that a review of the company's investmentstrategies outside of New Zealand had taken place over the last eighteen months. "While we have been looking at investments in Australia, we recognise thatproperties that would add additional value to our existing portfolio and at theright price are not readily available on the market. Our shareholders have toldus that they want to see better use of our financial resources and we have beenactively looking at a variety of opportunities to achieve this aim. We believethat this investment, in the medium to long term, will deliver financial returnswhich are better than what we could expect to receive if we pursued our currentinvestment policies", said Mr. Chiu. Mr. Chiu said that this is a unique opportunity to invest in a high-growth areaof China. "A significant attraction for investing in this joint venture is itsdiversification across a wide range of assets and property-related services, andits track record to date. i-Vale currently manages commercial, residential andmixed-use properties, undertakes landscaping and interior design services andalso conducts marketing of commercial, residential and mixed-used properties.Since its formation in late 2003, i-Vale has developed a track record ofdevelopment and growth in all of its business sectors as the Guangdong regionhas grown and we believe that its broad portfolio and selective approach is anappropriate fit for our Group", he said. He also noted that the Company would still continue to look at opportunitiesboth in New Zealand and Australia. "The amount of this investment will not curtail us seeking suitableopportunities whether they be in New Zealand or Australia. We have repeatedlystated that our medium-term aim is to obtain an appropriate foothold in theAustralian market and we also intend to maintain our position as New Zealand'slargest hotel owner / operator", he said. MCK and Tai Tak have a long working relationship and have an existing jointinvestment vehicle focused on Australia. Tai Tak's Chief Executive Officer Mr.Calvin Ho and Senior Vice President of Investments Mr. Alvin Ho both said thatTai Tak is pleased to be partnering with MCK in this venture. "We have been working with our New Zealand partners on looking at what optionswould benefit both MCK and ourselves both within Australasia and beyond. We arealso excited by the opportunities that this new joint venture investment has tooffer and we look forward to working with MCK to our mutual benefit". About i-Vale: Guangdong Idea Valley Group Co., Ltd. (i-Vale) is an integrated propertydevelopment, services and marketing company. Founded in late 2003, i-Vale isheadquartered in Dongguan City, Guangdong Province in Southern China. Mr. ZhangBingguang, its Chief Executive Officer, is an experienced property developerwith a successful track record over several years having worked in Shanghai,Hong Kong and Dongguan. The name 'i-Vale' refers to the English translation ofthe Chinese word which means 'intelligent valley'. i-Vale employs approximately150 staff within its group. It has properties and assets under management orownership in excess of 6.5 million square feet of saleable area. About Dongguan City: i-Vale's primary investments and focus are in Dongguan City, Guangdong Province,Southern China. Located on the Pearl River Delta and close to Guangzhou (thelargest city in Guangdong Province), Shenzhen and Hong Kong, Dongguan has apopulation in excess of 7 million people and is one of the fastest growingcities within China. Readily accessible by road, rail and home to a busy seaport, Dongguan is home to over 25,000 manufacturing enterprises of varioussizes, a significant number of which are involved in export-related businessesincluding computer parts manufacturers whose combined output amounts toapproximately 40% of global production. Dongguan's district town of Dalang isone of China's biggest wool suppliers and woolen garment manufacturers. About the real estate assets and related services companies: The real estate assets which are to come under the joint venture's Chinesesubsidiaries consist of inter alia: --Property management interest in one of China's largest wool-woven tradingmarkets. i-Vale is the sole manager of the complex and is responsible for saleand rental of the units making up the market;--Strata property interests in Stage I of a Textile Centre Development which hasbeen completely built and is in the process of letting; --Majority interests in: ---Stage II of a Textile Centre Development which is to be developed as a mixeduse (commercial and residential) property;---An operating lease over land to be developed as a mixed use (commercial andresidential) development;---An existing commercial enterprise which has an existing commercial propertyand which is to be redeveloped; and---A real estate company, which is the developer of a mixed use (commercial andresidential) property. Stage I (residential) has already been completed and themajority of the units have been sold. Construction of Stage II (commercial andresidential) has already commenced and marketing of the units will begin beforecompletion of the project. --A minority interest in a Textile Wholesale Centre which is to be developed asa mixed use (commercial and residential) property; The related services companies which are to become the Chinese subsidiaries ofthe joint venture are: --100% ownership of i-Vale's property management company;--A majority stake in i-Vale's property advertising company;--A majority stake in three of i-Vale's landscape engineering and designcompanies; and--A majority stake in a Shanghai investment company. ENDS Issued by Millennium & Copthorne Hotels New Zealand Limited Enquiries to:B K ChiuManaging DirectorMillennium & Copthorne Hotels New Zealand Limited+ 64 (09) 913 8058 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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