We will Change of Trading Name from "Kachikaihatsu" to "Polaris Holdings" to go through the Extraordinary General Meeting of Shareholders due to be held on April 28th, 2021.
April 27, 2021 FOR IMMEDIATE RELEASE Company Name: KACHIKAIHATSU Co., Ltd. Representative: Atsuo Umeki, President and Representative Director Stock Listing: Tokyo Stock Exchange, Second Section Stock Code: 3010 Inquiries: Satoshi Hosono, Director and CFO (TEL: 03-5822-3010)
Notice of Silent Partnership Investment and Operations Outsourcing of a New Hotel
Kachikaihatsu Co., Ltd. (hereinafter “Polaris Holdings”) announced today that its Board of Directors resolved at a meeting held today to make a silent partnership investment in a special purpose company (hereinafter the "SPC") that would acquire a trust beneficial interest, the assets—the land and building of a new hotel ([tentative name] KOKO HOTEL Tsukiji Ginza, hereinafter the "Hotel") located in Chuo-ku, Tokyo (hereinafter the "Hotel Property"). KOKO HOTELS Co., Ltd., a subsidiary of Polaris Holdings, has also resolved at a meeting of the Board of Directors held today to enter into a new operations outsourcing agreement to operate the Hotel (hereinafter the "Operations Outsourcing Agreement"). Details are as follows.
1. Silent partnership investment (1) Purpose of silent partnership investment The SPC plans to acquire the Hotel Property on April 30, 2021 using an investment from the Star Asia Group, the sponsor of Polaris Holdings, and an investment from Polaris Holdings. The acquisition price will be based within the real estate appraisal value range. Polaris Holding’s total investment in the SPC will be 204 million yen.
We expect Polaris Holdings will enjoy a high investment return due to an increase in earnings from the operation of the Hotel. Additionally, going forward, there is solid potential for the realization for a gain on sale on the Hotel with an associated recovery in the supply and demand environment as well as by undertaking the Hotel operations and making an investment in the SPC.
The SPC has been negotiating the acquisition of the Hotel Property based on an investment structure using the GK-TK scheme and Polaris Holdings has decided to enter into the Operations Outsourcing Agreement and make a silent partnership investment. When the SPC enters into an operations outsourcing agreement for the Hotel with the Polaris Holdings Group, Polaris Holdings will be able to take profits from the investment above.
(2) Date of silent partnership investment in the SPC April 27, 2021
- 1 - (3) Overview of the SPC in which the investment will be made Name Limited Liability Company Tsukiji Hotel Management Address 5-1-4, Toranomon, Minato-ku, Tokyo Positions and names of Presentative Partner General Incorporated Association Tsukiji Hotel representatives Management Business descriptions Acquisition, holding and disposition of beneficial interest in real estate trust, etc. Share capital 300 thousand yen Date of establishment October 25, 2019 Major shareholders and General Incorporated Association Tsukiji Hotel Management their shareholding ratios Capital relationship There are no relationships requiring special mention. Relationships between Human relationship There are no relationships requiring special mention Polaris Holdings and the Business relationship There are no relationships requiring special mention. corporation concerned Whether this company There are no relationships requiring special mention. is a related party
2. The Operations Outsourcing Agreement (1) Purpose of the Operations Outsourcing Agreement KOKO HOTELS Co., Ltd., a subsidiary of Polaris Holdings, has decided to enter into the Operations Outsourcing Agreement (OOA) to operate a hotel located in Chuo-ku, Tokyo and operate it as KOKO HOTEL Tsukiji Ginza (planned). KOKO HOTELS Co., Ltd. will work on commission fees that are linked to sales and profits of the Hotel and aim to secure consistent profits as a hotel operator even after the SPC sells the Hotel Property in the future. In addition to OOA, KOKO HOTELS Co., Ltd. will also enter into an agreement to receive 94 million yen as pre-operating funds from Limited Liability Company Tsukiji Hotel Management for the start of operation of the Hotel.
The Hotel is located five-minutes from Tsukiji Station on the Tokyo Metro Hibiya Line and a 10-minute walk from Higashi- ginza Station on the Tokyo Metro Hibiya Line and Toei Subway Asakusa Line. It is conveniently located to the Tsukiji Fish Market, which is very popular among domestic and foreign tourists and is also only a short walk from the Ginza shopping district. The Hotel also provides easy transportation access to both Haneda Airport and Tokyo Big Sight and Ariake. Further development is expected in this area because the redevelopment of the vacant site of Tsukiji Market and the opening of New Tsukiji Station (tentative name) are also planned.
The average size of the Hotel's guest rooms is 20 ㎡—spacious compared to most business hotels, and more than 70% of the guest rooms can be used by three or more guests. The Hotel also has four meeting rooms and two restaurants—somewhat unusual for facilities which will provide a competitive structure for capturing both leisure and group demand.
(2) Outline of the Hotel Hotel name Address Number of Planned date of guestrooms commencement of operation KOKO HOTEL Tsukiji Ginza 6-8-8 Tsukiji, Chuo-ku, Tokyo 188 Mid-September (planned) 2021
- 2 - (3) Date of the Operations Outsourcing Agreement April 30, 2021 (planned)
- 3 - (4) Outline of counterparty Name Limited Liability Company Tsukiji Hotel Management Address 5-1-4, Toranomon, Minato-ku, Tokyo Positions and names of Presentative Partner General Incorporated Association Tsukiji Hotel Management representatives Business descriptions Acquisition, holding and disposition of beneficial interest in real estate trust Share capital 300 thousand yen Date of establishment July 17, 2020 Major shareholders and their shareholding General Incorporated Association Tsukiji Hotel Management ratios Capital There are no relationships requiring special mention. relationship Human There are no relationships requiring special mention. Relationship between relationship the Company and this Business There are no relationships requiring special mention. company relationship Whether this company is a There are no relationships requiring special mention. related party
3. Outlook The impact of the silent partnership investment and the conclusion of the Operations Outsourcing Agreement on the financial results of Polaris Holdings for the current fiscal year will be minor, partly due to the COVID-19 pandemic. If there are any material developments in the future, Polaris Holdings will promptly make a public announcement.
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