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SCMP Reporter

HONG KONG-listed Shangri-La Asia has announced plans to buy six hotels around the Asia-Pacific region and 939 acres of freehold development land from a number of companies related to the Kuok Group for $4.15 billion.

  The plan, which is to be put to Shangri-La Asia's shareholders on March 1, would add an additional 2,734 hotel rooms to Shangri-La Asia's portfolio of properties.

  Shangri-La Asia will become a Hang Seng Index blue-chip on February 28.

  Currently, it only owns the Shangri-La hotels in Hong Kong and China.

  Although a string of other hotels around the region is managed by Shangri-La International Hotel Management - which is part of the Kuok Group - the ownership of these hotels has until now been held by other privately-owned and listed companies.

  Under the proposal, Shangri-La Asia would take 100 per cent stakes in the Shangri-La Hotel Manila, Shangri-La's Edsa-Plaza Hotel, also in Manila, and the Shangri-La Mactan Island Resort in Cebu.

  It also proposes taking a 20 per cent stake in the Shangri-La Hotel Jakarta and an effective 71.6 per cent stake in Fiji Resorts.

  Fiji Resorts, in turn, owns Shangri-La's 436-room Fijian Resort which stands on 109 acres of land on Yanuca Island, the 128-room Fiji Mocambo and golf course in Nadi and Natadola Land which owns about 939 acres of yet-to-be-developed land in Fiji.

  The purchase would be funded through the issue of 415.9 million new shares, at $10 a share, which would represent a premium of 9.9 per cent to the stock's closing share price of $9.10 on Friday.

  The new shares would represent about 39.3 per cent of the existing issued share capital of Shangri-La Asia.

  Following the proposed shake-up, the Kuok Group's interest in Shangri-La Asia would rise from 55.8 per cent to 63.1 per cent.

   Shangri-La Asia chairman Liu Tai Fung said: 'It is the long term objective of the Shangri-La Asia Group to have interests in an extensive network of hotel and associated property interests in Hong Kong, China and throughout the Asia-Pacific region.'   At the time of the company's listing on the Hong Kong Stock Exchange in June 1993, Shangri-La Asia had interests in two hotels in Hong Kong and six hotels with two associated properties in China.

  Since then, it has acquired in China the Xian Shangri-La Golden Flower Hotel, an additional 10 per cent interest in the Shanghai Centre and interests in 18 investment companies formed to undertake a variety of schemes around the country involving hotel and associated properties.

  Mr Liu said the proposed acquisitions would present Shangri-La Asia with an opportunity to expand into other growth areas in the Asia-Pacific region.

  All six of the hotels to be acquired are income generating and are expected, on completion of the deal, to contribute immediately to the earnings of Shangri-La Asia.

  'The directors believe that with these acquisitions, the Shangri-La Asia Group will evolve into a major and leading hotel and associated property investment group in the Asia-Pacific region,' said Mr Liu.

  'With its solid financial position and spread of investments following completion of the acquisitions, the directors are confident that, although there [will be] some earnings per share dilution in the initial years and initial net asset value per share dilution, the growth prospects of the Shangri-La Asia Group will be enhanced.'   International property consultants Vigers (Hong Kong) has valued Shangri-La's Edsa Plaza Hotel at about $992.2 million, the Shangri-La Hotel Manila at $2.29 billion and Shangri-La's Mactan Island Resort at $930.5 million as at December 31.

  The Shangri-La Hotel Jakarta has been independently valued at $1.56 billion, Shangri-La's Fijian Resort at $278.3 million, Fiji Mocambo at $54.1 million, and Natadola Land at $27.4 million as at December 31.



Shangri-La to buy six hotels