Dci Wins Radisson Franchise For Asia Pacific
The Age
Thursday July 23, 1998
The Sydney-based operators of Radisson Hotels in Australia and Asia have been granted an exclusive master franchise for the Asia Pacific region in a deal struck with the US-based Radisson Hotels Worldwide.
Under the terms of the deal, the US company will own 45 per cent of the operating company, DC International, but will control 57 per cent of the voting rights subject to another deal with DCI's major share holder, TA Properties.
DCI at present operates 18 Radisson Hotels in Australia, Indonesia and Malaysia under a licensing arrangement that allows it to use the Radisson name.
The new deal, which is subject to approval from DCI shareholders, will see the US company subscribe for 33 million shares in DCI at 10 cents each.
The deal will also result in the company buying an extra 21.4 million shares in TA Properties. The deal at this stage is for the TA shares to be bought at 10 cents, but that figure could rise as high as 20 cents, subject to performance clauses in the contract.
The share purchases will cost the US company between $5.4 million and $7.5 million, but will give DCI the master franchise for a larger geographical area, covering Singapore, Thailand, Vietnam, Brunei, Cambodia, Indonesia, Laos and the Philippines.
Radisson Hotels Worldwide's parent company, Carlson Hospitality Worldwide, said the deal was part of a global strategy to grow Radisson through increased investment, ownership and management of the hotel and resorts carrying its brand.
Carlson's president and chief executive, Mr Curtis Nelson, said: "While this is a global strategy, we are particularly pleased to be investing in this key market, and despite current economic challenges, we view the Asia Pacific region as a long-range opportunity and a strategic imperative for the travel and tourism industry."
DCI'S managing director, Mr Stephen Burt, said Radisson Hotels operated in Sydney, Cairns, Port Douglas, Brisbane, the Gold Coast, Melbourne, Adelaide, Newcastle. It also recently added a hotel at Dunsborough in the Margaret River region to its stable. Two additional hotels are under construction in Sydney.
He said the deal would provide the Australian operation with greater opportunity to expand its business.
"Notwithstanding the economic dislocation in Asia, the current environment is offering numerous opportunities for DCI and Radisson and this deal will greatly enhance our capability to fulfil our ambitions in the Asia region," Mr Burt said.
© 1998 The Age
