Proposed sale and purchase of a small company at HK$5mn in cash
Hong Kong Ferry (50.HK) and Miramar Hotel (71.HK) both issued anannouncement this evening. Hong Kong Ferry proposed to sell a smalltravel company called HYFCO Travel to Miramar Travel, a 53.8%-owned subsidiary of Miramar Hotel. The consideration involved issmall at only HK$5mn in cash, subject to accounting adjustments lateron. The deal is not concluded yet as only a letter of intent has beensigned. The deal is expected to be completed in 2H16. Both HongKong Ferry and Miramar Hotel are associates of Henderson Land.Henderson Land owns 33.41% of Hong Kong Ferry and 46.33% ofMiramar Hotel.
Don’t be alarmed, HLD continues to conduct small corporate events tostreamline business verticals
The deal involves only a small transaction amount of only HK$5mn,which is more or less equal to a price of a mass-end unit thatHenderson Land sells currently. Second of all, the deal aims tostreamline business verticals by putting the travel business back intothe pocket of Miramar. Hong Kong Ferry’s principal businesses areproperty development, property investment, ferry, shipyard and relatedbusinesses, travel operation and securities investment. MiramarHotel’s principal businesses are property rental, hotels and servicedapartments, food and beverage operation and travel operation. Thesmall deal follows another deal conducted in September-December2014 between Henderson Land and Henderson Investment (97.HK). Atthat time, Henderson Land sold its Citistore retail business toHenderson Investment for HK$934.5mn in order to help the latter setup an operating business (as the latter lacked one after a lawsuit of itshighway operation in China halted revenue recognition). In our opinion,both are corporate events of relatively small size and we believe thatthey are aimed at improving the business structure of Henderson Landas a whole in a gradual manner.