This article is from the Australian Property Journal archive
GPT Group has sold the Ayers Rock Resort for $300 million to the Indigenous Land Corporation.
The sale, which includes the GPT-owned Voyages platform, completes the group’s exit from the hotel and tourism sector.
In 1997, GPT made a foray into the sector by buying the resort from the Northern Territory Government and an Advent syndicate for $220 million.
As part of the deal, GPT will receive an $81 million payment on settlement of the transaction, expected to be in early 2011, a second $81 million 12 months after settlement and a $138 million five years after settlement.
GPT will be provided with security guaranteeing the deferred payments and receive interest on the deferred payments at a rate of 6.5% per annum.
CEO Michael Cameron said the sale was yet another example of the group’s delivery of its refined strategy to focus on the Australian retail, office and industrial markets.
“Ayers Rock Resort is a unique and high quality asset that continues to deliver solid returns but no longer fits with GPT’s focus.
“GPT continued to hold Ayers Rock Resort until we could realise value through the sale for our security holders,” he added.
The initial proceeds will be used to reduce borrowings.
Meanwhile GPT will also share in 46% of the increase in the value of Ayers Rock Resort over $300 million plus capital expenditure committed over the period with a minimum guaranteed payment to GPT of $17 million at the end of the five year transaction period.
With the minimum payment of $17 million being guaranteed, GPT will accrue annual increments of this payment over the five year transaction period which, when combined with interest received, will improve the return on the deferred payments by 2% per annum, ensuring that the earnings dilution from the transaction is minimised.
GPT will contribute $25 million towards capital expenditure at Ayers Rock Resort over the five year transaction period.
Australian Property Journal
