SINGAPORE - Orchard has set its sights on becoming the fifth-biggest player in Australia's hospitality segment.
It is proposing to do this by injecting about $500 million in assets and cash into separate joint venture deals with Straits Trading Company and property management firm Toga Group.
The deals will be put up for shareholder approval at an extraordinary general meeting to be held next Tuesday.
"With these transactions, we'll put ourselves in the top five in Australia," said Far East Hospitality chief executive Arthur Kiong yesterday.
"We'll find ourselves going toe to toe" with big hospitality players such as Accor and InterContinental, Mr Kiong said during a briefing at Orchard Parade Hotel.
The company is setting up a joint venture with Straits Trading.
It will own 70 per cent of the joint venture, while Straits Trading will own the remaining 30 per cent.
Straits Trading will inject into the joint venture, called Far East Hospitality Holdings, three hotels in Australia - the Rendezvous Hotel Perth, Rendezvous Studio Hotel Perth Central and Rendezvous Grand Melbourne.
The hotels are worth a net consideration of $174.6 million.
Straits Trading will also inject its hospitality management business RHI, worth $2.8 million, into the joint venture.