Luxury hotel operator Hongkong and Shanghai Hotels (HSH) has cleared a last hurdle to gaining indirect control of the 530-room Palace Hotel in Beijing for about HK$140 million in cash. 'All the conditions required to complete the restructuring of The Palace Hotel from a Sino-foreign equity joint venture into a Sino-foreign co-operative joint venture have been met,' HSH said in a statement yesterday. HSH and its mainland partners have been putting through a share restructuring of the Beijing hotel since December last year. The group said the lengthy process was due to the reorganisation needed to secure approval from mainland authorities. An HSH spokeswoman said the exact cost of the deal was still subject to adjustment until the completion of the agreement. It was also unclear what percentage holding HSH would have. Before the restructuring, HSH had a 20 per cent stake in The Palace Hotel. She said the group was entitled to receive 82 per cent of the annual income stream from the hotel with immediate effect. No annual revenue for The Palace Hotel was available. The group would also have control over The Palace Hotel's board, she said. HSH chief executive Clement Kwok said: 'With the completion of this restructuring, The Palace Hotel has become a subsidiary of the HSH group, which will increase the scope for us to operate the business independently and benefit from its future profitability.' An analyst said she expected the profit contribution from The Palace Hotel to be insignificant to the group because room yields in Beijing were not as attractive as in Hong Kong or other countries.