BIL International approves sale of Thistle Hotels

By NZPA

Monday 5th August 2002

Singapore-listed BIL International, formally Brierley Investments, has approved the sale of its 46 percent stake in British hotel chain, Thistle Hotels, British Papers reported over the weekend.

The stake will fetch about Stg750 million ($NZ2.56 billion), the Business Times said. Chief executive Ian Burke is also lining up a management buyout at around Stg720 million, it said.

The Times on Saturday reported that the sale talk was prompted by upheaval within BIL.

The speculation has its origins in last month's admission by Quek Leng Chan, the Singapore-based billionaire, that an unnamed third parted wants to buy his controlling 22 percent stake, it said.

"For his part, Mr Quek is expected to be a ready seller, given BIL's recent history of underperformance and almost constant restructuring," The Times said.

Thistle Hotels has been a millstone for BIL since it was bought in the Gulf War in 1991. The company put in a bid that was thought to be on the low side but when the war broke out, share prices plunged, particularly in the tourism sector and BIL was left holding the Stg1 billion baby.

The debt it took on to cope nearly sunk the company and it has been in virtual permanent restructuring mode ever since.

Rival hotel group Millennium & Copthorne, whose chairman and controlling shareholder is Kwek Leng Beng, cousin of Mr Quek, is also said to have approached Thistle while US group Cendant, French operator Accor and Six Continents were also in the frame.

Earlier this year, Thistle pulled off a Stg600 million sale and leaseback deal to London-based property group Orb Estates after coming under increasing pressure from shareholders for improved returns.

Shareholders have been hoping for a share buyback or special dividend since the Orb deal but nothing has come up.

Mr Burke said he would use at least some of the funds to pay Thistle's Stg170 million debt.

Thistle was hit hard by the September 11 terrorist action with sales falling 25 percent.

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