AH45 Citi Fun 24

RNS Number:7895S
BIL International Limited
12 March 2002



MASNET No. 13 OF 12.03.2002
Announcement No. 13



BIL INTERNATIONAL LIMITED


£600 Million Hotel Portfolio Disposal By Thistle Hotels Plc



Singapore, 12 March 2002 - BIL, an international investment company, announces
that UK-based Thistle Hotels PLC ("Thistle"), in which it holds a 45.9% stake,
has today reached an agreement to dispose of 37 of its hotels for a total
consideration of £600 million (equivalent to SGD1.56 billion).



Highlights



o        The disposal is a major step in closing the gap between the market
         price of Thistle's shares and Thistle's NAV per share.



o        The disposal underlines the net asset value of BIL's investment
         portfolio and reinforces BIL's balance sheet.



o        After the transaction Thistle will retain approximately £1b in hotel
         assets, mainly in prime London locations with its own hotels and 
         retained management contracts over the hotels sold, Thistle will have
         55 hotels under management.  Thistle now has the management, the hotels
         and the balance sheet to achieve sector leading growth going forward.



Greg Terry, CEO of BIL, stated:

"This is very good news for BIL shareholders.  Thistle is by far our most
important asset and this transaction demonstrates its true value."



Enquiries

BIL International Limited

Greg Terry, Chief Executive        Tel: +65 6438 0002

Arun Amarsi, Executive Director    Tel: +65 6228 1404 / Mobile: +65 9875 8709



A copy of the announcement submitted to the London Stock Exchange by Thistle is
attached.





Thistle Hotels Plc

12 March 2002

                               THISTLE HOTELS PLC
                          ("THISTLE" OR THE "COMPANY")

                      Proposed Disposal of 31 Regional and
               6 London Hotel Businesses (the "hotel businesses")
                                for £600 million

Transaction Highlights

Thistle announces that it has today reached agreement with Gamma Four Limited
(the "Acquirer"), a wholly-owned subsidiary of Euro & UK Property Limited (a
private venture capital company and the ultimate parent of the Orb group),
regarding the terms of the proposed disposal of a group of subsidiary companies
of Thistle which together own 37 Regional and London hotel businesses (the "
Disposal").

The principal features of the transaction are:

•        Total payment to Thistle of £600.4 million, comprising £1 to be paid in
cash on completion by the Acquirer to Thistle for the shares in three companies
(the "Sale Companies") that own the hotels and carry on the Hotel Businesses,
the repayment on completion by certain of the Sale Companies and certain
subsidiaries of the Sale Companies of approximately £555.4 million in settlement
of outstanding inter-company indebtedness due to Thistle and £45 million payable
no later than 1 January 2005 pursuant to a loan note issued to Thistle by one of
the companies to be sold to the Acquirer.

•        Upon completion of the Disposal, Thistle Hotels (Management) Limited, a
wholly-owned subsidiary of Thistle, will enter into agreements under which it
will undertake the ongoing management of each of the hotels for a period of 30
years from completion of the Disposal.

•        A relationship agreement will be entered into between Thistle and the
Orb group which will contain, among other provisions, a guarantee by Thistle in
relation to the level of earnings before interest, tax, depreciation and
amortisation ("EBITDA") derived from the Hotel Businesses.

•        The cash proceeds of the Disposal will amount to approximately £555.4
million, before transaction costs, a working capital adjustment and the
repayment to Thistle of the loan note. No significant tax liability is expected
to arise for Thistle on the Disposal of the Hotel Businesses. £174.0 million of
the net cash proceeds will be applied in the first instance to repay Thistle's
bank loans and the balance of the proceeds will increase the Company's cash
position by approximately £381.2 million (before transaction costs), thereby
providing Thistle with greater resources to pursue potential strategic
acquisition opportunities for further growth and development.

•        The 37 Hotel Businesses being disposed of comprise Thistle's Regional
hotels, excluding Thistle Heathrow and Thistle Edinburgh, and six London hotels.

•        For the year ended 30 December 2001, the Hotel Businesses had turnover
of £140.8 million and operating profit of £42.1 million, after charging
depreciation and amortisation of £13.4 million (giving EBITDA of £55.5 million).

•        Due to its size, completion of the Disposal requires the approval of
Thistle's shareholders. Irrevocable undertakings to approve the Disposal have
been given by shareholders representing approximately 59 per cent. of the issued
ordinary share capital of Thistle.

A circular will be posted to shareholders shortly setting out details of the
Disposal and convening an Extraordinary General Meeting to approve the Disposal.
The Disposal is expected to be completed following its approval at the
Extraordinary General Meeting.

Commenting on the Disposal, David Newbigging, Chairman of Thistle, said:

"This disposal represents a further significant step in the re-positioning of
the Company and both improves and rebalances Thistle's hotel portfolio. By
concentrating on delivering growth through our core hotel management business,
with a reduced emphasis on the capital intensive ownership of hotel properties,
we expect to benefit from increased operating flexibility. This transaction
significantly strengthens our balance sheet and leaves us well placed to pursue
potential strategic acquisition opportunities for further growth and
development, with the objective of delivering value to our shareholders and
improving the return on shareholders' equity."

Ian Burke, Thistle's Chief Executive Officer, added:

"The Board believes there will be opportunities for the continuing Thistle group
to develop its hotel business. Over the course of the current financial year the
Board's focus will continue to be on managing the business efficiently,
improving operational cash flow generation and seeking opportunities to improve
the return on shareholders' equity."

The Chairman of Orb Estates Plc, Samuel Nolan, commented:

"We are particularly pleased to have become involved with Thistle Hotels and to
have been part of such an innovative restructuring process."

Enquiries:

Thistle Hotels Plc                              Tel: 020 7895 2304
Ian Burke, Chief Executive Officer
Ian Durant, Finance Director

Merrill Lynch                                   Tel: 020 7628 1000
Simon Mackenzie-Smith
Richard Nourse

Deutsche Bank                                   Tel: 020 7547 6925
Charles Wilkinson

Hogarth Partnership Limited                     Tel: 020 7357 9477
Nick Denton



This summary should be read with the full text of the attached announcement.

(An analysts' conference call will be held at • (am/pm) today.)



Merrill Lynch International is acting for Thistle and no one else in connection
with the proposals described in this press release and will not be responsible
to anyone else for providing the protections afforded to the clients of Merrill
Lynch International nor for providing advice in relation to such proposals.






                               THISTLE HOTELS PLC
                          ("THISTLE" OR THE "COMPANY")

                      Proposed Disposal of 31 Regional and
               6 London Hotel businesses (the "hotel businesses")
                                for £600 million



Introduction

Thistle announces that it has today reached agreement with Gamma Four Limited
(the "Acquirer") regarding the terms of the proposed disposal of a group of
subsidiary companies of Thistle which together own 37 Regional and London hotel
businesses in return for a total payment of £600.4 million, including the
settlement of inter-company indebtedness (the "Disposal"). The Acquirer, which
is a wholly-owned subsidiary of Euro & UK Property Limited (a private venture
capital company and the ultimate parent of the Orb group), will acquire the
shares in the relevant companies and will assume the liabilities of the
companies being sold. The constituent elements of the total amount to be paid to
Thistle comprise:

(a)    £1 to be paid in cash by the Acquirer to Thistle for the shares in three
companies (the "Sale Companies") that either directly, or indirectly through
certain wholly-owned subsidiaries, own the hotels and carry on the Hotel
Businesses which are being disposed of;

(b)   the repayment by certain of the Sale Companies and certain subsidiaries of
the Sale Companies of approximately £555.4 million in settlement of outstanding
inter-company indebtedness due to Thistle; and

(c)    £45 million payable pursuant to a loan note issued to Thistle by LPH
London Park Limited, one of the companies to be sold to the Acquirer as part of
the proposed transaction.

The £1 payable for the shares in the Sale Companies and the £555.4 million
payable to settle the outstanding inter-company indebtedness are to be paid to
Thistle immediately upon completion of the Disposal. In addition there will be a
pound for pound payment for the actual working capital (excess, or deficit, of
current assets over current liabilities) in the Hotel Businesses at completion.
The loan note is to remain outstanding and will be redeemed no later than 1
January 2005.

Upon completion of the Disposal, Thistle Hotels (Management) Limited, a
wholly-owned subsidiary of Thistle, will enter into agreements under which it
will undertake the ongoing management of each of the hotels for a period of 30
years from completion of the Disposal. In addition, a relationship agreement
will be entered into to govern the relationship between Thistle and the Orb
group. This agreement will contain, among other provisions, a guarantee by
Thistle in relation to the level of earnings before interest, tax, depreciation
and amortisation ("EBITDA") derived from the Hotel Businesses.

Completion of the Disposal is, because of its size, conditional on the approval
of Thistle's shareholders. Thistle's two largest shareholders have given
irrevocable undertakings to the Acquirer to vote in favour of the Disposal. A
circular convening an Extraordinary General Meeting ("EGM") to seek approval for
the Disposal will be posted shortly to Thistle shareholders.

The Disposal is expected to be completed following its approval at the EGM.

Background to and reasons for the Disposal

During 2001 Thistle completed a three-year major upgrade programme positioning
the Company as a leading full-service hotel group and improving its comparative
position. This programme has resulted in a continuation of improvements in
Thistle's ranking as a brand in the UK hotel market. In December 2001, Thistle
sold its Poole hotel business to Orb Estates Plc, a privately owned, UK-based
property company within the Orb group, and now manages that hotel under an
operating agreement.

The Disposal represents a further significant step in the re-positioning of the
Company and both improves and rebalances Thistle's hotel portfolio. By
concentrating on delivering growth through its core hotel management business,
with a reduced emphasis on the capital intensive ownership of hotel properties,
Thistle expects to benefit from increased operating flexibility.

The Board believes that the terms of the Disposal reflect the value and
prospects of the Hotel Businesses which are the subject of the Disposal.

The net cash proceeds of the Disposal will be applied in the first instance to
repay Thistle's bank loans and the balance of the proceeds will increase the
Company's cash position, thereby strengthening Thistle's balance sheet. This
will provide the Company with greater resources to pursue potential strategic
acquisition opportunities for further growth and development with the objective
of delivering value to its shareholders and improving the return on
shareholders' equity.

Information on the Hotel Businesses

The Hotel Businesses comprise Thistle's Regional hotels, excluding Thistle
Heathrow and Thistle Edinburgh, and six London hotels. The six hotels in London
are Thistle Lancaster Gate, Thistle Bloomsbury, Hendon Hall, Cannizaro House,
Thistle Kensington Park and Thistle Kensington Palace.

For the year ended 30 December 2001, the Hotel Businesses had turnover of £140.8
million and operating profit of £42.1 million, after charging depreciation and
amortisation of £13.4 million (giving EBITDA of £55.5 million). As at 30
December 2001 the net assets of the Hotel Businesses were £609.7 million.

Principal terms and conditions of the Disposal

The Disposal is to be effected pursuant to a share sale agreement dated 12 March
2002 which provides for the sale to the Acquirer of all of the shares held by
Thistle in each of the three Sale Companies which own directly or indirectly the
hotels and carry on the Hotel Businesses (the "Share Sale Agreement"). Euro & UK
Property Limited, a private venture capital company which is the ultimate parent
company of the Orb group, and Orb Estates Plc have agreed to guarantee, on a
joint and several basis, the obligations of the Acquirer under the Share Sale
Agreement and other documents entered into by it in connection with the
Disposal.

The total initial payment to be made to Thistle under the Share Sale Agreement
will comprise: (a) £1 to be paid in cash by the Acquirer to Thistle for the
shares in the Sale Companies; and (b) the repayment by certain of the Sale
Companies and certain subsidiaries of the Sale Companies to Thistle of
approximately £555.4 million in settlement of the outstanding inter-company
indebtedness due from them to Thistle. The Share Sale Agreement also provides
that there will be a pound for pound payment between Thistle and the Acquirer in
respect of the working capital employed in the Hotel Businesses as at completion
of the Disposal which, if negative, would result in a payment by Thistle to the
Acquirer.

In addition, one of the Sale Companies, LPH London Park Limited, has issued to
Thistle a £45 million interest-bearing loan note with a coupon of 5 per cent.
per annum which is to remain outstanding and is to be redeemed no later than 1
January 2005. The obligations of LPH London Park Limited under this loan note
will be guaranteed by the Acquirer, Euro & UK Property Limited and Orb Estates
Plc with effect from completion of the Disposal. Thistle will be granted a
second ranking charge over the shares in Hotel Portfolio II (Jersey) Limited, a
Jersey incorporated company within the Orb group, by way of security for the
guarantee obligations in respect of the loan note. Thistle's rights in respect
of this second ranking charge are fully subordinated to those of Morgan Stanley
Dean Witter Bank Limited, the provider of debt finance to the Orb group in
connection with the Disposal, and accordingly there can be no certainty that
Thistle will ultimately realise the full value of the loan note.

Completion of the Disposal is conditional only upon the approval of the
shareholders of Thistle and upon neither Thistle nor any relevant member of the
Sale Companies and their respective subsidiary undertakings (the "Sale Group")
being the subject of certain insolvency events in the period prior to
completion. All documents required to effect completion have been executed and,
together with the monies payable at completion in connection with the Disposal,
have been placed into escrow pursuant to the terms of an escrow agreement
entered into between, among others, Thistle, the Acquirer and the escrow agent.
It is expected that the relevant documents and monies will be released from
escrow in accordance with the terms of the escrow agreement following the EGM.

Upon completion of the Disposal, Thistle Hotels (Management) Limited, Thistle
and Hotel Portfolio II UK Limited, a wholly-owned subsidiary of Euro & UK
Property Limited, will enter into separate operating agreements on arm's length
terms for the ongoing management of each of the hotels by the Thistle group for
a period of 30 years from completion of the Disposal.

Thistle Hotels (Management) Limited, Thistle and Hotel Portfolio II UK Limited
will also enter into a relationship agreement which will govern certain aspects
of the relationship between the continuing Thistle group and Hotel Portfolio II
UK Limited. In particular, the relationship agreement will contain a guarantee
by Thistle in favour of Hotel Portfolio II UK Limited in relation to the level
of EBITDA derived from the Hotel Businesses, in accordance with the terms of the
operating agreements, in each of the ten years following completion of the
Disposal. Under this guarantee, the minimum EBITDA guaranteed by Thistle in any
one year cannot exceed £45 million and Thistle's maximum aggregate liability
over the whole term of the guarantee is capped at £90 million.

Irrevocable undertakings to vote in favour of the Disposal

Thistle's two largest shareholders, BIL International Limited and Government of
Singapore Investment Corporation Pte Limited, have provided the Acquirer with
irrevocable undertakings to vote in favour of the Disposal in respect of their
entire holdings of ordinary shares in Thistle, representing in aggregate
approximately 59 per cent. of the issued ordinary share capital of the Company.

Financial effects of the Disposal

The cash proceeds of the Disposal will amount to approximately £555.4 million,
before expected transaction costs of £3.5 million, a working capital adjustment
and the repayment to Thistle of a loan note issued by LPH London Park Limited
amounting to £45 million. No significant tax liability is expected to arise for
Thistle on the Disposal of the Hotel Businesses. The net cash proceeds of the
Disposal will be applied in the first instance to repay Thistle's bank loans of
£174.0 million with the balance of the proceeds increasing the Company's cash
position by approximately £381.2 million (before transaction costs). With pro
forma net cash of £380.0 million as at 30 December 2001, Thistle will have
greater resources to pursue potential strategic acquisition opportunities for
further growth and development.

Based on the net assets of the Hotel Businesses as at 30 December 2001, namely
£609.7 million, the net loss on disposal is £13.0 million. However, the net
assets on completion will be less than £609.7 million because of the adoption of
FRS 19 "Deferred taxation" (which requires the provisioning for deferred
taxation in full) and depreciation up to completion. Accordingly, an actual net
profit on disposal will be recorded and disclosed as an exceptional item during
the financial year ending 29 December 2002.

Current trading and prospects

The following statement is set out in Thistle's unaudited preliminary results
for the year ended 30 December 2001, announced by the Board on 4 March 2002:

"Over the first eight weeks of the current financial year, turnover was down
some 10 per cent. on the comparative period last year with a greater decrease in
London against a strong comparative period in the early months of 2001. However,
turnover over this eight week period is broadly in line with the same period in
2000. We intend to actively manage our costs, with a focus on reducing our cash
operating expenditures and capital expenditures in 2002, as compared to 2001."

The Board believes there will be opportunities for the continuing Thistle group
to develop its hotel business. Over the course of the current financial year the
Board's focus will continue to be on managing the business efficiently,
improving operational cash flow generation and seeking opportunities to improve
the return on shareholders' equity.

Management and employees

Each of Thistle and the Orb group attaches importance to retaining the skills
and experience of the management and employees of the Hotel Businesses. Although
the general managers of the hotels will continue to be employed by Thistle, the
remaining management and employees of the Hotel Businesses will become employees
of the Orb group following completion of the Disposal.

Extraordinary General Meeting

A circular containing further details of the proposed Disposal and convening an
Extraordinary General Meeting to approve the Disposal will be posted to Thistle
shareholders shortly.

                                      END





Submitted by Jane Teah, Company Secretary on 12/03/2002 to the SGX



                      This information is provided by RNS
            The company news service from the London Stock Exchange

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