Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.
萬 達 酒 店 發 展 有 限 公 司
WANDA HOTEL DEVELOPMENT COMPANY LIMITED
(Incorporated in Bermuda with limited liability)
(Stock Code : 169)
DISCLOSEABLE TRANSACTION
IN RELATION TO TENANCY AGREEMENT
THE TENANCY AGREEMENT
The Board is pleased to announce that on 6 March 2020 (after trading hours), Wanda Hotel Management (Shanghai) Co., Ltd (an indirect wholly-owned subsidiary of the Company) as the Tenant entered into the Tenancy Agreement with the Landlord for tenancy in respect of the Premises for a term of 16 years commencing on or before 15 June 2020.
LISTING RULES IMPLICATIONS
In accordance with HKFRS 16 "Leases", the Company will recognise the value of the right- of-use asset on its consolidated statement of financial position in connection with the lease of the Premises under the Tenancy Agreement. Accordingly, the transaction under the Tenancy Agreement is regarded as an acquisition of asset by the Tenant for the purpose of the Listing Rules.
As one or more of the applicable percentage ratios (as defined under the Listing Rules) calculated based on the value of the right-of-use of the Premises under the Tenancy Agreement to be recognised by the Company according to HKFRS 16 exceed 5% and all applicable percentage ratios are less than 25%, the transaction contemplated under the Tenancy Agreement constitutes a discloseable transaction of the Company and is subject to announcement requirements under Chapter 14 of the Listing Rules.
INTRODUCTION
On 6 March 2020 (after trading hours), Wanda Hotel Management (Shanghai) Co., Ltd (an indirect wholly-owned subsidiary of the Company) as the Tenant entered into the Tenancy Agreement with the Landlord for tenancy in respect of the Premises for a term of 16 years commencing on or before 15 June 2020.
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THE TENANCY AGREEMENT
The principal terms of the Tenancy Agreement are set out below:
Date: | 6 March 2020 |
Tenant: | Wanda Hotel Management (Shanghai) Co., Ltd*(萬達酒店管理(上 |
海)有限公司) | |
Landlord: | Wuxi Jinjiang Grand Hotel Co., Ltd* ( 無錫錦江大酒店有限公司) |
To the best of the Directors' knowledge, information and belief | |
having made all reasonable enquiries, the Landlord and the ultimate | |
beneficial owner of the Landlord are third parties independent of the | |
Company and its connected persons (as defined in the Listing Rules). | |
The Premises: | Certain portion (including the reception and lobby area on 1st floor, |
the entire 7th to 12th floor, 15th to 22nd floor, 25th to 26th floor and | |
28th floor and certain kitchen area on 27th floor as clearly delineated | |
in the Tenancy Agreement) of Wuxi Jinjiang Grand Hotel located at | |
218 and 222 Zhongshan Road, Wuxi, Jiangsu, PRC | |
Lettable area: | Approximately 22,056.04 square meters |
Term: | 16 years commencing on the day that the Landlord handover the |
Premises to the Tenant | |
The Landlord will handover the Premises on a date no later than 15 | |
June 2020 after satisfaction by the Tenant of certain conditions in | |
relation to the conditions of the Premises, completion of the filing | |
registration for the Tenancy Agreement and the termination of the | |
Landlord's existing management contract in respect of the Premises | |
Rent payable: | The aggregate rent payable under the Tenancy Agreement is |
RMB141,034,726, which shall be payable quarterly in advance, | |
with the first payment to be made on the day which the Tenant takes | |
possession of the Premises, in accordance with the following sums | |
per annum: | |
For the first to third year: RMB8,050,000 per year (subject to | |
deduction for the renovation period) | |
For the fourth to sixth year: RMB8,452,500 per year | |
For the seventh to ninth year: RMB8,875,125 per year | |
For the tenth to twelfth year: RMB9,318,881 per year |
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For the thirteenth to fifteenth year: RMB9,784,825 per year | ||
For the sixteenth year: RMB10,274,067 | ||
Management fees: | Management fees of the following sums per annum shall be payable | |
quarterly by the Tenant to the Landlord in advance, with the first | ||
payment to be made on the day which the Tenant takes possession of | ||
the Premises: | ||
For the first to third year: RMB3,450,000 per year (subject to | ||
deduction for the renovation period) | ||
For the fourth to sixth year: RMB3,622,500 per year | ||
For the seventh to ninth year: RMB3,803,625 per year | ||
For the tenth to twelfth year: RMB3,993,806 per year | ||
For the thirteenth to fifteenth year: RMB4,193,497 per year | ||
For the sixteenth year: RMB4,403,172 | ||
Air conditioning fee: | An air conditioning fee (including the use, repair and maintenance | |
of air conditioning within the Premises) is payable by the Tenant | ||
quarterly: | ||
1st year of the Tenancy Agreement: RMB2,041,700 | ||
Remainder of the Tenancy Agreement: RMB3.50 million per year | ||
Fire services facilities | A fire services facilities operation and maintenance staff fee of | |
operation and | RMB120,000 per annum is payable by the Tenant quarterly. | |
maintenance staff fee: | ||
Renovation period: | A renovation period of 4 months is provided during which rent and | |
management fee will be waived. Such rent and management fee | ||
accrued during the renovation period will be evenly deducted from | ||
each rent and management fee payments to be made by the Tenant | ||
during the first and second year of the Tenancy Agreement. |
Accordingly, an aggregate of RMB2,683,333 of rent payable and RMB1,150,000 of management fee payable will be deducted from the total rent and management fee payable of the first and second year of the Tenancy Agreement.
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Deposits: | RMB5,750,000, representing one half of the yearly rent and |
management fee for the first to third year, shall be paid by the Tenant | |
within 20 days after signing the Tenancy Agreement. | |
RMB9,583,333, representing rent and management fees in the first 12 | |
months of the Tenancy Agreement (from 2020 to 2021) shall be paid | |
by the Tenant within 20 days after taking possession of the Premises. | |
Permitted usage: | The Premises shall only be used for operation as a hotel and any other |
ancillary business supporting purposes, including but not limited to | |
guest rooms, restaurants, lobby lounge, conference room, banquet | |
hall, gym (for hotel guests only), laundry room. |
The unaudited value of the right-of-use asset recognized by the Company under the Tenancy Agreement amounts to approximately RMB87.8 million, which is the present value of the total rent payable during the term of the Tenancy Agreement in accordance with HKFRS 16. Discount rate of 6.13% is applied to compute the present value of total rent payable under the Tenancy Agreement.
REASONS AND BENEFITS OF THE TENANCY AGREEMENT
In line with the Group's strategy to transform into a fee-based business, the Group intends to use the leased Premises for the operation of its hotel management business. The Directors believe that the Premises is located at a prime location in Wuxi which will be ideal for the operation of a hotel and will bring continuous business growth opportunities for the Group in Wuxi.
The terms of the Tenancy Agreement were determined after arm's length negotiations between the Landlord and the Tenant with reference to the prevailing market rent for properties of similar use, floor area and location. Therefore, the Directors consider that the terms of the Tenancy Agreement are fair and reasonable and entering into the Tenancy Agreement is in the interests of the Company and the Shareholders as a whole.
INFORMATION ON THE PARTIES
The Company
The Company and its subsidiaries are principally engaged in property development, property investment, property management, development and operation of hotel, hotel management, hotel design and hotel construction management.
The Tenant
The Tenant is a company incorporated in the PRC with limited liability and is an indirect wholly- owned subsidiary of the Company. The Tenant is principally engaged in hotel management and operation.
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The Landlord
The Landlord is a company incorporated in the PRC with limited liability. The Landlord's principal businesses include hotel management consulting, food and beverage operations, property leasing and provision of carpark services.
LISTING RULES IMPLICATIONS
In accordance with HKFRS 16 "Leases", the Company will recognise the value of the right- of-use asset on its consolidated statement of financial position in connection with the lease of the Premises under the Tenancy Agreement. Accordingly, the transaction under the Tenancy Agreement is regarded as an acquisition of asset by the Tenant for the purpose of the Listing Rules.
As one or more of the applicable percentage ratios (as defined under the Listing Rules) calculated based on the value of the right-of-use of the Premises under the Tenancy Agreement to be recognised by the Company according to HKFRS 16 exceed 5% and all applicable percentage ratios are less than 25%, the transaction contemplated under the Tenancy Agreement constitutes a discloseable transaction of the Company and is subject to announcement requirements under Chapter 14 of the Listing Rules.
DEFINITIONS
Unless otherwise specified, the following terms have the following meanings in this announcement:
"Board" | the board of Directors |
"Company" | Wanda Hotel Development Company Limited, a company |
incorporated in Bermuda with limited liability whose shares are | |
listed on the Stock Exchange | |
"connected person(s)" | has the meaning given to it under the Listing Rules |
"Directors" | directors of the Company |
"Group" | the Company and its subsidiaries |
"HKFRS" | Hong Kong Financial Reporting Standards issued by the Hong |
Kong Institute of Certified Public Accountants | |
"Hong Kong" | the Hong Kong Special Administrative Region of the PRC |
"Landlord" | Wuxi Jinjiang Grand Hotel Co., Ltd*( 無錫錦江大酒店有限公 |
司), a company incorporated in PRC with limited liability |
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"Listing Rules" | the Rules Governing the Listing of Securities on the Stock |
Exchange | |
"PRC" | the People's Republic of China which, for the purpose of this |
announcement, shall exclude Hong Kong, the Macao Special | |
Administrative Region of the People's Republic of China and | |
Taiwan | |
"Premises" | certain portion (including the reception and lobby area on 1st |
floor, the entire 7th to 12th floor, 15th to 22nd floor, 25th to 26th | |
floor and 28th floor and certain kitchen area on 27th floor as | |
clearly delineated in the Tenancy Agreement) of Wuxi Jinjiang | |
Grand Hotel located at 218 and 222 Zhongshan Road, Wuxi, | |
Jiangsu, China | |
"RMB" | Renminbi, the lawful currency of PRC |
"Shareholder(s)" | the holder(s) of shares issued by the Company |
"Tenancy Agreement" | the tenancy agreement dated 6 March 2020 and entered into |
between the Landlord and the Tenant in respect of tenancy of | |
the Premises | |
"Tenant" | Wanda Hotel Management (Shanghai) Co., Ltd*(萬達酒店 |
管理(上海)有限公司), a company incorporated in PRC with | |
limited liability and an indirect wholly-owned subsidiary of the | |
Company | |
"%" | per cent. |
* for identification purposes only | |
By Order of the Board | |
Wanda Hotel Development Company Limited | |
Ding Benxi | |
Chairman | |
Hong Kong, 6 March 2020 |
As at the date of this announcement, Mr. Ding Benxi (Chairman), Mr. Zhang Lin and Mr. Han Xu are the non-executive Directors; Mr. Ning Qifeng is the executive Director; and Dr. Chen Yan, Mr. He Zhiping and Dr. Teng Bing Sheng are the independent non-executive Directors.
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Wanda Hotel Development Co. Ltd. published this content on 06 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 March 2020 10:52:01 UTC