(Yicai Global) Feb. 28 -- China Youth Travel Service, one of the country's three largest travel agencies, has partnered Jiaweishijie Equity Investment Partnership to buy a 10 percent stake in Beijing Gubei Water Town Tours for CNY850 million (USD127.1 million) from Beijing Energy Holding.
CYTS Tours will pay CNY438.7 million for a 5.1 percent stake through the deal, the Beijing-based tour operator said. Zhuhai-based Jiaweishijie will take a 4.8 percent share for CNY411.3 million.
Gubei Water Town, located at the town of Gubeikou in Beijing's Miyun District, is backed by the steep Simatai section of the Great Wall. The resort achieved business revenue of CNY991 million in 2017, with a net profit of CNY112 million. It posted income of CNY689 million and net profit of CNY201 million for the first eight months of last year.
The Chinese travel agency has valued Gubei Water Town for a while. It already held a 41 percent stake in the resort before the deal in partnership with Wuzhen Tourism Development. Its second-largest shareholder is Boston-based IDG Capital, holding a 30 percent stake and BEH is the third-largest.
BEH had planned to sell-off its 20 percent stake through the Beijing Equity Exchange last June with CYTS Tours participating in the transfer as assignee on July 7. However, the plan was abruptly aborted on July 18 after CYTS Tours and Wuzhen Tourism Development expressed their opposition.
The target of the current transfer is only a 10 percent stake compared with the 20 percent previously. And the base price of the transaction has been halved accordingly, which means that the financial pressure faced by CYTS Tours in the interim period is less than last time. It will hold a 46.45 percent stake in the resort once it is completed further consolidating its position.