Icelandair Group has signed a share purchase agreement in which Berjaya Property Ireland Limited, a subsidiary of the Malaysian property company Berjaya Land Bhd, has acquired a 75% stake in Icelandair Hotels and related real estate. The completion of the transaction is set for year-end 2019, and the deal is subject to Icelandair retaining a 25% stake for a minimum of three years.
Berjaya Land Berhad, which operates in sectors such as hotels and resorts, property investment, and retail, has around 4,000 employees and annual revenues of USD1.6 billion, according to an Icelandair statement on the deal.
Berjaya is purchasing the 75% shareholding for USD53.63 million, it said in a filing to the Malaysian Stock Exchange on July 15, the New Straits Times reported, while Icelandair said in its statement that its hotel business had an enterprise value of USD136 million.
Icelandair Hotels operates nine properties across the country with a total of 1,811 rooms. A tenth in collaboration with Hilton Hotels is set to open in 2020. Revenue from the business amounted to USD97 million in 2018 with an EBITDA of USD7 million. The group said in its 2018 annual report that the abrupt slowdown in inbound tourism growth from 20-30% to 4.5% and a strong Icelandic currency negatively impacted last year's results.
Icelandair Group is in the process of shifting its focus to its core aviation business, and it announced in early June that it expected to start a divestment process for its tour operator subsidiary Iceland Travel this coming autumn.
