Indonesian hotel operator Pusako Tarinka is planning a $55.7-million deal with the company that operates Tune Hotels, a budget hotel chain founded by Malaysian tycoon Tony Fernandes, reports the Jakarta Globe.
The Indonesian company also aims to nearly triple its hotel rooms to 3,000, with most of the expansion in Jakarta and other major cities in Southeast Asia’s largest economy, Pusako Tarinka president director Suwito said.
“The budget hotel sector in Indonesia is the fastest growing, the most resilient, and the most profitable sector of the hospitality market,” said Suwito.
Under the deal, Pusako Tarinka will sell 1.27 billion shares at Rp 500 each in a rights issue in June. Red Planet Indonesia and its affiliates will subscribe to the shares and the listed company will be renamed Red Planet Indonesia.
Red Planet currently owns and operates seven hotels in Indonesia under a franchise agreement with Tune Hotels.
From 2009 to 2013, the total sales value of Indonesian budget hotels has jumped 79.5 percent to around Rp 3 trillion, according to Euromonitor International data.