Source: Icelandair Group hf.

Berjaya purchases Icelandair Hotels and related real estate

Icelandair Group has signed a share purchase agreement (the “Agreement”) with Berjaya Property Ireland Limited (“Berjaya”), a subsidiary of Berjaya Land Berhad, whereby Berjaya acquires a majority share in Icelandair Hotels and related real estate (the “Company”).

Berjaya Land Berhad is a listed Malaysian-based corporation that operates in multiple sectors, such as hotels and resorts, property investment and retail. Berjaya Land Berhad and its affiliate companies have around 4000 employees and annual revenue of around USD 1,6 billion. The founder and executive Chairman of the Berjaya Group is Tan Sri Dato Vincent Tan.

Icelandair Hotels operate hotels all around Iceland, with a total of 1,811 rooms. In addition, the Company will open a new 145-room hotel at Austurvöllur Square in Reykjavik's Parliament district in collaboration with Hilton Hotels in 2020. In 2018, the revenue of Icelandair Hotels amounted to USD 97 million and the total number of employees was 699. The EBITDA of the hotel operations amounted to USD 7 million and rental income from real estate amounted to USD 5 million. The total size of the Company’s real estate is 17,738 sqm and includes Hilton Canopy Reykjavik, Icelandair Hotel Akureyri, Icelandair Hotel Mývatn and Icelandair Hotel Hérað.

According to the Agreement Berjaya will acquire a 75 percent equity share in Icelandair Hotels, subject to Icelandair Group holding a 25 percent equity share for a minimum of three years. Alongside the signing of the Agreement, Icelandair Group and Berjaya, have entered into a put and call option agreement regarding the remaining 25 percent equity share.

The enterprise value of Icelandair Hotels amounts to USD 136 million. The completion of the transaction is set for year-end 2019, subject to fulfilment of conditions by both parties.

Íslandsbanki and HVS London acted as advisers to Icelandair Group.

Taurus SLF acted as advisors to Berjaya.

Bogi Nils Bogason, CEO Icelandair Group:

“The immense growth in visitors to Iceland has seen tourism flourishing in the last few years. Icelandair Group has been instrumental in this process, partly by taking a lead in the strategic development of authentic and high-quality hospitality services across the country through Icelandair Hotels. While we shift the focus of Icelandair Group to our core aviation business, we are pleased to bring such an experienced international investor to the table which we believe confirms the value and quality of the Company and the prospects of Icelandic tourism for the years to come. I would like to take this opportunity to thank the management and employees of Icelandair Hotels for an outstanding job in developing such a robust and unique business that has created an important value for the Icelandic tourism industry.”

Tan Sri Dato Vincent Tan, executive chairman of the Berjaya Group:

“Berjaya’s acquisition of a 75% stake in Icelandair Hotels will complement our Group’s current portfolio of 19 city and resort hotels located in Malaysia, Vietnam, Philippines, Japan, Sri Lanka, Seychelles and the UK. This Iceland deal represents an addition of several new hotel brands comprising about 1,811 rooms to Berjaya’s hotel network and will allow us to introduce a fresh and invigorating Nordic experience to our existing and new customers from Asia.

I believe this investment represents good long-term value for our group’s hotels division. We look forward to working with our new partner to bring the Icelandair Hotels group to even greater heights.”