Hong Kong-listed Kai Yuan buys Paris Marriott Hotel Champs-Elysees hotel
HK-listed Kai Yuan pays €344.5m for five-star property to capitalise on city's tourism appeal
A Hong Kong investment company has agreed to pay €344.51 million (HK$3.61 billion) for the five-star Paris Marriott Hotel Champs-Elysees, as it targets mainland tourists' desire for luxury travel.
Kai Yuan Holdings announced its plan to buy the seven-floor, 100-year-old hotel in a filing to the Hong Kong stock exchange late on Monday.
Shares in the firm surged 62 per cent yesterday to close at 15.7 HK cents.
The company is mainly engaged in industrial investments on the mainland, including in steelmaking and supplying heating to cities.
It said it had been looking for investment opportunities in hotels to diversify revenue sources and capitalise on the growth of the global tourism industry.
"As the capital of the most visited country in the world, Paris has been benefiting from its importance as a global hub for business, culture and tourism," it said in the stock exchange filing.
France is the world's No1 tourist destination, with French government figures showing 83 million people visited last year. It is also the prime destination for mainland tourists, with a record 1.4 million visitors last year.
Kai Yuan said it would market the hotel to mainland tourists, adding that it "takes an optimistic view" on the prospects for the global tourism industry.
The company reported HK$757.5 million in revenue last year, but a net loss for the year of HK$104.9 million.
It said the deadline for completion of the Paris hotel sale was September 5 and it would borrow US$280 million from shareholder Du Shuanghua, who holds a 5.54 per cent stake in the company.
The management agreement with Marriott International would expire in 2030 and would be automatically renewed for three successive periods of 10 fiscal years, it said.
The purchase of the hotel in Paris is Kai Yuan's second acquisition in six months.
In December last year, it agreed to buy a 90-room, 32-storey property in Sheung Wan for HK$488 million.
Agence France-Presse, Bloomberg