Joint Venture Agreement

RNS Number : 8969K

Park Plaza Hotels Limited

22 July 2011

Park Plaza Hotels Limited

("Park Plaza")

Joint venture agreement to acquire a site in Thailand

for mixed-use development including an upscale hotel

Park Plaza, an owner, operator, developer and franchisor of hotels in Europe, the Middle East and Africa, is pleased to announce that it has today, through a wholly-owned subsidiary, entered into a joint venture agreement with Kitaria Holdings Limited ("Kitaria") to acquire a site located in Pattaya Bay, Thailand (the "Site"). This opportunity allows the Park Plaza Group to expand into Asia with the development of a 40,000 square meter mixed-use complex including a 100 room upscale hotel.

Following completion ("Completion") of the acquisition of the company which owns the Site by the joint venture, Park Plaza and Kitaria will each hold 50% of the voting shares and 45% of the profit participation shares in the joint venture. The remaining 10% of the profit participation shares in the joint venture will be held by a minority investor in the company that owns the Site (the "Minority Investor").

On Completion, the joint venture will acquire a 93.2% legal interest and a 99.9% economic interest in the company that owns the Site, Bali Hai Co., Ltd ("Bali Hai") from the Elran Group, an Israeli based investment group, certain of its related entities and the Minority Investor (the "Acquisition"). The remaining 6.8% legal interest in Bali Hai will be indirectly owned by a Thai individual.

The consideration payable by the joint venture to the Elran Group and its related entities is US$7 million in cash, US$5 million of which is payable on Completion and US$2 million of which is payable within 90 days of Completion. These amounts are subject to adjustment dependent on the level of liabilities of Bali Hai at Completion. The payments will be funded through equal shareholder loans from the Park Plaza Group and Kitaria to the joint venture and the US$2 million payment will be guaranteed by Park Plaza on Completion (the "Guarantee").

The consideration payable to the Minority Investor is the 10% of the profit participation shares in the joint venture mentioned above.

The joint venture has also agreed to lend to Bali Hai a secured credit facility of up to US$2.5 million (the "Loan"). The Park Plaza Group has agreed to advance the funds to the joint venture for the purpose of making the Loan.

In consideration for the Guarantee and funding the Loan, Kitaria has granted an option (the "Option") to the Park Plaza Group to acquire all the shares held by it in the joint venture at an exercise price equal to the higher of (i) the aggregate par value of such shares, and (ii) the amounts contributed by Kitaria, by way of loan or equity, to the joint venture to fund the Acquisition.

The Acquisition is subject to certain conditions (each to be fulfilled or waived on or before Completion), including that the aggregate amount of Bali Hai's outstanding liabilities as at Completion plus the total amount of advances made to Bali Hai under the Loan does not exceed US$2.7 million.

Under the terms of the joint venture, the parties shall procure that Bali Hai shall enter into a management agreement with the Park Plaza Group to manage the hotel to be constructed on the Site. The joint venture will explore branding options in relation to this development.

Boris Ivesha, President & Chief Executive Officer of Park Plaza, said:

"We are delighted to have had the opportunity to expand into Asia by acquiring an interest in this attractive site located in the popular holiday resort of Pattaya Bay, Thailand. We intend to develop this site for mixed-use including construction of a new 100 room upscale hotel. We have considerable expertise and a strong track record in developing, building and managing new hotels and we look forward to progressing this project with our joint venture partner."

Enquiries:

Park Plaza Hotels Limited
Boris Ivesha, President and Chief Executive Officer	Tel: +44 (0)20 7034 4800
Chen Moravsky, Chief Financial Officer	Tel: +31 (0)20 717 8603

Hudson Sandler	Tel: +44 (0)20 7796 4133
Wendy Baker / Kate Hough

Investec	Tel: +44 (0)20 7597 4000
James Grace

Notes to Editors

About Park Plaza

Park Plaza Hotels Limited owns, leases, develops, manages and franchises primarily full service four-star, four-star deluxe and contemporary lifestyle hotels in major gateway cities and regional centres primarily in Europe. The majority of the Group's hotels operate under the Park Plaza Hotels & Resorts brand (part of Carlson), over which the Group has exclusive rights in 56 countries in Europe, the Middle East and Africa, or art'otel, a brand which Park Plaza fully owns.

Through its strategic partnership with Carlson, one of the world's largest travel and hospitality companies, Park Plaza has access to Carlson's powerful reservation and distribution system, airline partnerships with 22 airlines, loyalty programmes such as Club Carlson^SM for guests and look to book^® for travel agents and cross-selling opportunities.

The Group currently has 25 Park Plaza hotels and art'otels, with 5,447 rooms in operation. New projects under development include Park Plaza Nuremberg (2013), art'otel amsterdam (2012), a 61-room extension of art'otel berlin city center west (2012) and art'otel london hoxton (2013).

Park Plaza also part owns Arenaturist, one of Croatia's leading hospitality companies, and operates 8 hotels and 5 apartment complexes (with a total of 2,868 rooms) and 7 campsites in Istria, Croatia.

Park Plaza's shares are admitted to trading on the main market of the London Stock Exchange (Standard Listing).