Bangkok-based Red Planet Hotels has taken a 16.05% stake in rapidly expanding budget group Tune Hotels.
While the value of the deal remains undisclosed it is a "significant multi-million dollar transaction" and the largest single corporate investment Red Planet Hotels has clinched in its two-year history.
It cements Red Planet Hotels - a major franchisee of the brand across South-East Asia - as the third largest investor in Tune Hotels with 9,975,038 shares. The investment follows an oversubscribed latest round of fund raising.
The company now has $180 million of investment in hotels, covering 3,191 rooms either operating or under construction in Asia. Tony Fernandes, founder of Tune and the Air Asia brands, remains the largest shareholder in Tune Hotels.
Established in 2007, there are 24 Tune Hotels operating 3,859 rooms globally with a pipeline of 38 more properties with 10,106 rooms, including the first hotels in India, Scotland, Australia and Saudi Arabia along with additional properties in Thailand, Indonesia, the Philippines, Malaysia and England.
Red Planet Hotels will have 10 hotels with 1,623 rooms in Thailand, the Philippines and Indonesia by the end of the year.
Chief executive Tim Hansing said: "This significant investment and commitment to the Tune Hotels brand is indicative of Red Planet Hotels' well-balanced long-term development programme and provides tremendous value growth to our existing shareholders.
"As we move towards becoming a major owner and operator of Tune Hotels properties, this investment and endorsement of Tune's board and management allows Red Planet Hotels to participate and contribute constructively and meaningfully for the benefit of both companies.
"Each will reap significant rewards through our investment and I am delighted that Red Planet Hotels' commitment to Tune Hotels has resulted in us being invited to join its board."
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