Thistle sale won't hurt value, says BIL


BIL chief executive Greg Terry calls the $850 million Thistle Hotels deal "good news" for shareholders

SINGAPORE (CNN) -- Singapore investment company BIL International says the $850 million sale of 37 U.K. hotels by its 46-percent held Thistle Hotels may have a "material impact" on its earnings per share, but not its net asset value.

BIL, formerly Brierley Investments, will give an estimate of the impact on earnings when it reports interim results next Tuesday.

Thistle Hotels said in a statement to the London Stock Exchange on Tuesday it was selling 37 of its 55 hotels to Gamma Four Ltd, a unit of the private venture capital company, Euro & UK Property Ltd.

Thistle will keep the management rights to the hotels, which comprise 31 U.K. regional properties and six London hotels.

BIL chief executive Greg Terry, in a release to the Stock Exchange of Singapore, said that Thistle was "by far our most important asset and this transaction demonstrates its true value".

"This is very good news for BIL shareholders."

Other investors

Along with BIL at 45.9 percent, the other key shareholders in Thistle are the Government of Singapore Investment Corporation, with 13 percent, and Temasek Holdings with 6 percent.

After the deal, Thistle will have about $1.4 billion in hotel assets, mainly in prime London locations. It will also have the management contracts for all 55 hotels.

BIL shares, which ended 2 cents lower at S$0.43 on Tuesday after the announcement, slipped 3.5 percent to S$0.415 in late Wednesday trade.

BIL, controlled by Malaysian tycoon Quek Leng Chan, has seen one of its other investments collapse in value in recent months.

It held 30 percent of Air New Zealand, but that stake was cut to 5 percent after the New Zealand government was forced to rescue the troubled carrier with a $360 million recapitalization in October.

The NZ government now holds 83 percent of the airline. Singapore Airlines, which held 25 percent, saw its stake cut to 4.5 percent.

BIL's other main investment is the Singapore food and beverage company Fraser & Neave.