2) Parties involved and their relationship with the listed company

Transcription

1 (Translation) Information Memorandum on Acquisition of Assets of Singha Estate Public Company Limited Pursuant to List 2 of the Notification of The Board of governors of The Stock Exchange of Thailand (No. 1, 2, 3, 5(3), 7 and 8 of List 2) The meeting of the Board of Directors of Singha Estate Public Company Limited (the Company ) No. 6/2015 held on 30 th September 2015 resolved to approve S Hotels and Resorts (UK) Limited ( S UK ), a 99.99% subsidiary of the Company to jointly invest in Jupiter Hotels Holdings Limited ( JHH ) through an indirect subsidiary of FS JV Co Limited ( FS JV ), a newly setup 50:50 joint-venture company between S UK and FICO Holding (UK) Limited ( FICO UK ) which is part of FICO Group ( FICO ). On 1 st October 2015, S UK had invested a stake in FS JV, a company incorporated in England with a registered capital of GBP 1.00 million (fully paid-up) and equally held by S UK and FICO UK, constituting equal voting rights and control with 2 directors appointed by each party. On the same day, S UK also entered into a facility agreement with FS JV whereby FS JV borrowed a total of GBP 40 million or equivalent to THB 2, million from S UK for a period of 5 years at the interest rate of LIBOR+6.5% per annum. Pursuant to the conditions specified in the aforementioned joint venture agreement and facility agreement, the Company does not have more controlling power in FS JV and its subsidiaries. Furthermore, the Company s auditor has considered and opined that the Company is able to recognize profit in proportion to shareholding at 50% with equity method. On 10 th October 2015, FS Senior Co Limited ( FS SENIOR ), a 100% indirect subsidiary of FS JV, entered into a sales and purchase agreement with Patron Jupiter Holdings S.A.R.L and West Register Hotels (Holdings) Limited for the purchase of 27,100,000 shares of JHH, with a par value of GBP 1.00, which is equal to 100% of the paid-up capital, for the price of approximately GBP million or approximately THB 4, million. For the Investment in JHH to be debt-free from third parties, FS SENIOR will borrow from financial institution and lend to JHH and its subsidiaries to repay existing loans from financial institutions and current shareholders, amounting to GBP million or approximately THB 4, million. The total value for investment is approximately GBP million or THB 8, million. Moreover, it is expected that related transaction costs, such as legal fees, financial advisory fees, etc. on top of the investment value will not exceed GBP 5.00 million or approximately THB million. However, the completion of the aforementioned transaction is subject to certain conditions satisfaction. On 14 th October 2015, FS Mezz Co Limited ( FS MEZZ ) and FS Senior Co Limited ( FS SENIOR ), a 100% subsidiary of FS JV, entered into facility agreements with a financial institution for a total drawdown Page 1/15

2 amount of GBP million or equivalent to THB 6, million which is guaranteed by FS JV s ultimate shareholders the Company and FICO according to their respective (indirect) shareholding in FS JV; which, in this case, is 50:50. The transaction is considered an acquisition of assets in accordance with Notification of the Capital Market Supervisory Board No. ThorChor.20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets dated 31 August 2008, and Notification of the Board of Governors of the Stock Exchange of Thailand ( SET ) Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition or Disposition of Assets B.E (2004) dated 29 October 2004 (the Notification on Acquisition or Disposal ). The maximum transaction size is equal to 36.84% on a total-valueof-consideration basis, hence it is considered a Type-2 transaction in accordance with the Notification on Acquisition or Disposal with the transaction size of 15% or higher but less than 50%. Therefore, the Company is required to disclose the information memorandum as follows: 1. Information Memorandum Schedule 1 - Information Memorandum submitted to The Stock Exchange of Thailand according to the Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition or Disposition of Assets B.E (2004) ( Information Memorandum Schedule 1 ) 1) Date of entering into the transaction FS SENIOR, a 100% subsidiary of FS JV, has entered into sales and purchase agreements with Patron Jupiter Holdings S.A.R.L and West Register Hotels (Holdings) Limited for the purchase of 100% stake in JHH on 10 th October ) Parties involved and their relationship with the listed company Buyer Sellers : FS SENIOR : The shareholders of JHH, consisting of 2 parties as follows: - Patron Jupiter Holdings S.A.R.L 50% holding in JHH - West Register Hotels (Holdings) Limited 50% holding in JHH The above mentioned sellers and their ultimate shareholders Patron Capital L.P.III and Royal Bank of Scotland are not connected persons according to the Notification of the Stock Exchange of Thailand Re: Rules, Procedures and Disclosure of Information Concerning the Connected Transaction of Listed Companies B.E Therefore, such transaction is not considered a connected transaction according to the notification. Page 2/15

3 3) General characteristics, type, and size of asset acquisition transaction The exchange rate used in the calculation is GBP 1 = THB (Source: Bank of Thailand) as of 30 September 2015 which is the date that the Board approved the transactions. 3.1) General characteristics of asset acquisition transaction FS SENIOR will purchase 27,100,000 shares of JHH, with a par value of GBP 1.00, which is equal to 100% of the paid-up capital, for the price of approximately GBP million or approximately THB 4, million. For the Investment in JHH to be debt-free from third parties, FS SENIOR will borrow from financial institution and lend to JHH to repay its loans from current financial institutions and shareholders, amounting to GBP million or approximately THB 4, million. The total value for investment is approximately GBP million or approximately THB 8, million. Moreover, the estimated expenses relating to this transaction, such as legal fee expenses, financial advisory expenses, etc. in excess of the investment value will not be exceeding GBP 5 million or approximately THB million On 10 th October 2015, FS SENIOR has entered into sales and purchase agreements and the closing date is expected to be 15 th October Summary of the Investment Structure Page 3/15

4 Note: S Hotels and Resorts Inter Limited ( SHR Inter ) S Hotels and Resorts (HK) Limited ( S HK ) S Hotels and Resorts (UK) Limited ( S UK ) FS Mezz Co Limited ( FS MEZZ ) FS Mid Co Limited ( FS MID ) FS Senior Co Limited ( FS SENIOR ) Jupiter Hotels Holdings Limited ( JHH ) Jupiter Hotels Midco Limited ( Jupiter Mid ) Jupiter Hotels Limited ( Jupiter Hotels ) Jupiter Hotels Wetherby Limited ( Jupiter Hotels Wetherby ) Jupiter Hotels Management Limited ( Jupiter Hotels Management ) 3.2) Total value of the consideration The transaction is considered an acquisition of assets in accordance with Notification of the Capital Market Supervisory Board No. ThorChor.20/2551 Re: Rules on Entering into Material Transactions Deemed as Acquisition or Disposal of Assets 2008 (the Notification on Acquisition or Disposal ). Based on the financial statement of the Company and JHH as at 30 th June 2015 and 31 st December 2014, respectively. The maximum transaction size is equal to 36.84% on a total-value-of-consideration basis, with value of consideration of GBP million or approximately THB 5, million, derived from (a) investment of GBP 0.50 million and loan to FS JV of GBP million, which is equal the total of GBP million or approximately THB 2, million and (b) the guarantee of 50% loan from financial institution according to shareholding, amounting to GBP million or approximately THB 3, million. The calculation of the transaction size is as detailed below: 1. Comparison of net tangible asset (NTA) value Transaction size = % of NTA in the acquisition proportion x Comparison of net profit NTA of the Company = 1, x 50% x 100 = 7.20% 8, Transaction size = % of net profit in the acquisition proportion x 100 Net profit of the Company = Cannot be calculated due to negative net profits of the Company Page 4/15

5 3. Comparison of total value of consideration Transaction size = Value of consideration received/paid x 100 Total assets of the Company = 5, x , = 36.84% 4. Comparison of equity share value Transaction size = Number of shares issued as consideration x 100 Total number of issued and paid-up shares of the Company = Cannot be calculated as there is no share issuance Calculation details of the transaction size of the purchase of JHH shares: Basis of calculation Transaction size 1. Net tangible asset (NTA) value method 7.20% 2. Net profit method Cannot be calculated 3. Total value of consideration method 36.84% 4. Securities (issued to pay for assets acquired) value method Cannot be calculated Note: NTA = Total assets Intangible assets Total liabilities Non-controlling equity (if any) The Company does not have an acquisition of assets in the past six months which are required to be combined in the calculation. The maximum transaction size is equal to 36.84% based on the total-valueof-consideration basis, hence it is considered a Type-2 transaction in accordance with the Notification on Acquisition or Disposal with the transaction size 15% or higher but less than 50%.Therefore, the Company is required to disclose to the Stock Exchange of Thailand the information memorandum on such transaction, and shall serve a written notice to its shareholders within 21 days from the date of the disclosure of the information memorandum on such transaction to the Stock Exchange of Thailand. 4) Description of assets to be acquired JHH is a holding company, holding 100% of paid-up capital of Jupiter Hotels Midco Limited ( Jupiter Mid ), and Jupiter Mid holds 100% of paid-up capital of Jupiter Hotels Limited ( Jupiter Hotel ). Jupiter Hotel engages in a hospitality business, owning 26 freehold/leasehold hotels in the United Kingdom, 25 hotels directly and 1 hotel indirectly through Jupiter Hotel Wetherby Limited ( Jupiter Hotel Wetherby ), a 100% subsidiary of JHH. Moreover, JHH also holds 100% of paid-up capital of Jupiter Hotels Management Limited ( Jupiter Hotels Management ), which manages 6 hotels (not include in the transaction). Page 5/15

6 Shareholding Structure of JHH The 26 hotels that FS JV will invest in have 2,883 keys in total, with 20 freehold hotels and 6 longterm leasehold hotels (remaining leasehold periods from 18 to 94 years). In 2014, it had average occupancy rate of 66% and average room rate of GBP per night. 4.1) Description of 26 hotels Hotels Address (City) Keys Rating Tenure Mercure Ayr Ayr Freehold Mercure Bolton Georgian House Bolton 91 3 Freehold Mercure Bradford Bankfield Bingley Freehold Mercure Brighton Seafront Brighton Freehold Mercure Bristol North, The Grange Bristol 68 4 Freehold Mercure Burton-on-Trent, Newton Staffordshire 50 4 Freehold Park Mercure Chester East Chester Freehold Mercure Edinburgh City - Princess Street Edinburgh Leasehold ended 2038 Mercure Glasgow City Glasgow 91 3 Leasehold ended 2036 Mercure Gloucester, Bowden Hall Gloucester 72 4 Freehold Mercure Hull Grange Park Hull Freehold Mercure Inverness Inverness Freehold Mercure Kidderminster Kidderminster 44 4 Freehold Mercure Leeds Parkway Leeds Freehold Page 6/15

7 Hotels Address (City) Keys Rating Tenure Mercure Leicester The Grand Leicester Freehold Mercure Livingston Livingston Leasehold ended 2033 Mercure London Watford Watford Freehold Mercure Maidstone Great Danes Maidstone Freehold Mercure Manchester Piccadilly Manchester Leasehold ended 2060 Mercure Newbury Elcot Park Newbury 73 4 Freehold Mercure Norwich Norwich Freehold Mercure Perth Perth 76 3 Leasehold ended 2033 Mercure Swansea Swansea Leasehold ended 2109 Mercure Tunbridge Wells Tunbridge 84 4 Freehold wells Mercure Wetherby Wetherby Freehold Mercure York, Fairfield Manor Skelton 89 4 Freehold Hotels Address (City) Keys Rating Tenure 4.2) List of JHH major shareholders as of 31 July 2015 Name Shareholding No. of shares % of Paid-up Capital Patron Jupiter Holding S.A.R.L 13,550, West Register Hotels (Holdings) 13,550, Total 27,100, ) List of JHH directors as of 24 March 2015 Name Albridge Services London Limited Philip Andrew James Currie Stephen Edward Timothy Green Platinum Nominees Limited Position Director Director Director Director Page 7/15

8 4.4) Operation results and financial status Income Statement For the Period (Unit: GBP million) Total revenue Gross profit EBITDA EBIT Net profit (loss) (1.75) (0.01) 3.86 Statement of Financial Position For the Period (Unit: GBP million) Cash and cash equivalents Account receivable and other current assets Land building and equipment - net Intangible assets Total Assets Account payable and short-term loan Long-term loan Total liabilities Issued and paid-up share capital Retained earnings (4.98) (5.00) (1.13) Shareholders equity ) Total value of consideration and other conditions FS SENIOR will pay for total value of the investment of approximately GBP million or approximately THB 8, million, consisting of (a) payment to the seller for 100% of JHH shares of GBP million or approximately THB 4, million and (b) loan repayment to current financial institutions and shareholders of JHH, amounting to GBP million or approximately THB 4, million. Moreover, the estimated expenses relating to this transaction, such as legal fee expenses, financial advisory expenses, etc. in excess of the investment value will not be exceeding GBP 5.00 million or approximately THB million. The whole amount of investment will be paid after the completion of certain customary conditions satisfaction stated in the sales and purchase agreement. Page 8/15

9 6) Value of acquired assets The book value as of 31 December 2014 was equivalent to GBP million or THB 1, million. The Company will receive 50% of the assets, in proportion to shareholding in FS JV. 7) Criteria for determination of consideration value The criteria used for determining value of the consideration is from negotiation between the Company, FICO and the Seller. 8) Expected benefits from the transaction 1. The target hotels are located in potential area e.g. central business district, beach front which are suitable for MICE business etc. 2. The target hotels have the potential growth as United Kingdom hospitality industry is during the recovery period. 3. The target hotels are under Mercure brand which is globally accepted in quality of services. 4. It is an opportunity for the Company to expand its hospitality business which is one of the Company s core businesses and the Company can share existing resource and enhance the Company s knowhow from management of Accor group. 5. The investment in hotel abroad which has stable and strong economy will diversify the Company s risk as all of the current Company s businesses are located in Thailand. 6. The target hotels are expected to generate reasonable return while the business risk is low. 7. The investment in hotels is expected to generate long-term recurring income as the Company is allowed to recognize 50 percent of profit as the holding stake in FS JV. 8. The Company will finance loan to FS JV as there is time constraint specified by seller and the Company can seek the loan from bank in that limited time, thus the Company proposes to lend the money to FS JV for investing in hotels. Such loan will generate return better than appropriate interest rate and both parties agree to have equal controlling stake as the equity portion is equally invested and it is appropriateness to have FICO as a strategic partner. 9) Sources of finance for the entry into the transaction 9.1 FS SENIOR, will pay GBP million in cash or equivalent to THB 2, million (S UK and FICO UK each will invest in common share of FS JV in an amount of GBP 0.50 million and S UK will lend GBP million which is 5-year term loan with interest rate at LIBOR % per annum to FS JV.) Page 9/15

10 9.2 The bank loan of GBP million or equivalent to THB 6, million will be borrowed by FS MEZZ and FS SENIOR, subsidiaries of FS JV. (The Company and FICO, as the shareholder of FS JV, will equally guarantee those loans) 10) Opinion of the Board of Directors on the transaction The Board of Directors meeting of the Company No. 6/2015, with the Audit Committee members present, considered the above information presented by executive committee, independent financial advisor, and legal advisor, and opined that the investment in hotels in United Kingdom by joint venture is deemed appropriate and reasonable and will create returns and value to both the Company and its shareholders in the long run. 11) Opinion of the audit Committee The Company s Audit Committee members, after due consideration, has the same opinion as the Board of Directors. 2. Responsibility of the director with respect to the information in documents sent to shareholders The Board of Directors of the Company have reviewed the information in this Information Memorandum with care in their capacity and according to the available information and certified that the information contained in this Information Memorandum is accurate, complete, true, not materially misleading, and no important information, which should be disclosed, are omitted. 3. Opinion of an independent expert None 4. Financial projections in the present year (if any), including assumptions on trade, economics, industry and review of the figures by a certified public auditor and opinion of an independent financial advisor that the projections have been carefully prepared None 5. Pending material lawsuits or claims. None Page 10/15

11 6. s or related transactions between the Company and its subsidiaries with the parties who may have conflict of interest with the Company and its subsidiaries The related transactions between the Company and its subsidiaries with the parties who may have conflict of interest with the Company and its subsidiaries as at 31 December 2014 and 30 June 2015 can be summarized as follows: Individual / Juristic Person who May Have Conflict of Mr. Santi Bhirombhakdi Singha Property Development Co., Ltd. Max Future Co., Ltd. Type of Related Transaction Long-term loan to related party Loans from related party Accrued interest expense Transaction Value (Baht) 31 Dec Jun 15 Page 11/15 Details and Rationale 555,088 - Zero-interest long-term loan by the Company to Mr. Santi Bhirombhakdi with maturity on demand - 3% p.a. interest rate loans from the 132,000,000 Company to Singha Property Development Co., Ltd. for use as working capital and for project development with maturity on demand - 1,633,973 Accrued interest from 3% p.a. interest rate loans from related party for use as working capital and for project development with maturity on demand Other payable - 10,043,564 Provision for design and consultant fee expense - 1,116,986 expense from loan from related party Loans to related party Other receivable receivable - 80,000, % p.a. interest rate loans from Max Future Co., Ltd. to the Company for use as working capital and for project development with maturity on demand - 1,120,890 Advance payment - 563,014 receivable from 3% p.a. interest rate loans to related party for use as working capital and for project development with maturity on demand income - 475,890 income from loan to related party

12 Individual / Juristic Person who May Have Conflict of S Hotel Phi Phi Island Co., Ltd. S Hotel Management Co., Ltd. Phi Phi Village Asset Management Co., Ltd. Nirvana Development Co., Ltd. Boon Rawd Brewery Co., Ltd. Type of Related Transaction Loans from related party Accrued interest expense expense Other receivable Transaction Value (Baht) 31 Dec Jun 15 Page 12/15 Details and Rationale - 789,250, % p.a. interest rate loans from the Company to S Hotel Phi Phi Island Co., Ltd. for use as working capital and for project development with maturity on demand - 33,585,901 Accrued interest from 3% p.a. interest rate loans from related party for use as working capital and for project development with maturity on demand - 21,650,137 expense from loan from related party - 219,927 Advance payment Other payable - 14,489,375 Payment for monthly service fee Revenue from management fee - 64,500,000 Management fee Other income - 501,261 Rental and service income expense - 447,432 expense from loan from related party Other - 2,889,000 Service fee receivable Other - 444,066 Management fee receivable Revenue from - 444,066 Management fee service Revenues from service Trade receivables - Net 341,837 - Considered a normal business 237,488 - transaction whereby customers from Boon Rawd Brewery Co., Ltd. received a regular corporate discount at rate of 25%, which is the same rate given to the agents, with no brokerage fee. Santiburi Beach Resort and Spa

13 Individual / Juristic Person who May Have Conflict of Boon Rawd Trading Co., Ltd. Boonrawd Asia Co., Ltd. EST Company (1993) Co., Ltd. Type of Related Transaction Loan from related parties Revenue from sale of condominium unit Revenue from service Revenues from service Account receivables - Net Expense from purchase of goods Revenues from service Transaction Value (Baht) 31 Dec Jun 15 Page 13/15 Details and Rationale absorbed such discount. Trade receivables have a 30-day credit term, similar to that given to prime customers. 90,000,000-3% p.a. interest rate loans to related parties for use as working capital and for project development with maturity on demand - 9,090,000 Sale of condominium unit - 155,525 Room revenue 47,872 47, Considered as a normal business transaction whereby customers from Boon Rawd Trading Co., Ltd. received a regular corporate discount at rate of 25%, which is the same rate given to the agents, with no brokerage fee. Santiburi Beach Resort and Spa absorbed such discount. Trade receivables have a 30-day credit term, similar to that given to prime customers ,505 Water for distribution and for servicing guests at Santiburi Beach Resort and Spa 360,000 - Revenues from rental service from renting retail area to EST Company ( ) to operate a biscuit & bakery shop. The three-year lease contract started from 1 September

14 Individual / Juristic Person who May Have Conflict of Santiburi Samui Country Club Co., Ltd. Bo Phut Property Co., Ltd. Bo Phut Property and Resort Co., Ltd. Type of Related Transaction Transaction Value (Baht) 31 Dec Jun 15 Details and Rationale However, such contract was terminated on 1 October Trade receivables have a 30-day credit term. Other income 710,810 - Revenues from utility fees Trade payables 3,513 - Trade payables incurred from guests of Santiburi Beach Resort and Spa pay their green fees in advance to the hotel income 11,935, % p.a. long-term loan from the Company to Santiburi Samui Country Club Co., Ltd. with maturity on demand. However, Santiburi Samui Country Club Co., Ltd. has fully repaid such loan in December Other receivable - 140,481 For food, beverage, and service fee at golf course Expense from - 738,505 Expense for room and laundry service purchase of goods Other payable - 53,746 Payable incurred for room and other service fee Expense from - 370,142 Expense for room and other service fee purchase of e.g. laundry, bakery, and delivery fee goods Trade receivables - Net 44,940 - Revenues from room services, based on ad hoc agreements between Bo Phut Resort and Spa and Santiburi Beach Resort and Spa for the transfer of guests when rooms are not available under agreed room exchange rates. Trade receivables have a 30-day credit term, similar to that given to other parties. Page 14/15

15 Individual / Juristic Person who May Have Conflict of Max Future Engineering Co., Ltd. Type of Related Transaction Trade payables related party Trade payables Transaction Value (Baht) 31 Dec Jun 15 Details and Rationale 42,947 - These transactions are the expenses that Bo Phut paid the fees for advertising in newspapers and magazines to Santiburi Beach Resort and Spa. 284,593 - Trade payables incurred from construction cost of Building A and Building B, refurbishment cost of rooms in Zone 200 totaling 14 rooms and others of Santiburi Beach Resort and Spa, and renovation cost of Singha Park Asoke Building, rooftop expansion work and architectural and interior decoration work. Such costs were comparable to rate of a normal business which gross margin is comparable to that charged to third parties. The Company hereby certifies that the information contained herein is correct and complete in all respects. Yours faithfully, Singha Estate Public Company Limited - // - (Mr. Naris Cheyklin) Chief Executive Officer Remark: The disclosure of the acquisition of assets is prepared under List 2 No. 1, 2, 3, 5(3), 7 and 8 of the Notification of The Board of Governors of The Stock Exchange of Thailand Re: Disclosure of Information and Other Acts of Listed Companies Concerning the Acquisition or Disposition of Assets B.E (2004). Page 15/15