Banyan Tree completes Chinese joint venture

Banyan Tree completes Chinese joint venture

Vanke deal leads to formation of Banyan Tree Assets China (BTAC) and divestment of 5% stake

Vanke deal leads to formation of Banyan Tree Assets China (BTAC) and divestment of 5% stake

Banyan Tree Lijiang
Banyan Tree Lijiang

Banyan Tree has completed an agreement for the creation of a new joint venture in China, plus the divestment of a stake in its main company.

The Singapore-based luxury hotel group has joined forces with China Vanke to create Banyan Tree Assets China (BTAC), a 50-50 joint venture incorporated in Singapore, which will consolidate the ownership of its Banyan Tree-branded hotels and assets in China.

As part of the arrangement, BTAC will now hold a 40% stake in each of Banyan Tree’s operating companies in Singapore: Banyan Tree Hotel Management China (BTMC) and Banyan Tree Services China (BTSC).

Vanke will inject approximately SG$72 million (US$53m) into BTAC, in return for newly-issued shares. It has also invested a further sum of approximately SG$18m into BTMC and BTSC.

The move forms part of Banyan Tree’s efforts to expand in China and to fund its own expansion. Following its formation, BTAC will immediately own net assets valued at approximately SG$100m and will be tasked with acquiring or developing hotels and resorts in mainland China under Banyan Tree’s brands.

Vanke has also purchased a 4.99% stake in Banyan Tree for approximately SG$24m with the option of increase its share in the company to 10% in future. This follows the recent sale of a 5% stake in Banyan Tree to AccorHotels.

Banyan Tree currently operates 15 hotels in China under its Banyan Tree and Angsana brands. Two more, Banyan Tree Anji and Angsana Xishuangbanna, are due to open in 2018.

Mark Elliott
Written by:
Mark Elliott
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Luxury

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