Far East Consortium to sell 49.9pc stake in Melbourne Ritz Carlton to executives

Far East Consortium International (0035) said it plans to sell a 49.9 percent stake in Ritz Carlton in Melbourne, Australia along with debts for A$116.6 million (HK$629.43 million) to a company held by top executives. 

Executive director Jennifer Wendy Chiu and her father David Chiu, chairman and chief executive of the developer, hold a 55 percent and 45 percent stake, respectively, in the buyer, according to a filing on Thursday. 

The total consideration is around A$58.2 million after deducting the estimated amount of outstanding bank loan in the hotel, representing a premium over 49.9 percent of the market value, the filing said. 

Far East is expected to record a gain of approximately A$18.3 million from sale, which will be used for the general working capital.

The company considers that the transaction will realize the value of the hotel, allow the capital to be recycled, and increase liquidity and reduce net gearing of the group.

It is consistent with the group’s strategy of unlocking development profits from its hotel portfolio, as well as divesting non-core assets, it said.