Shangri-La Asia to Raise Up to $674m in Rights Offer

(Bloomberg) Shangri-La Asia Ltd., one of Asia’s biggest luxury-hotel operators, will raise as much as HK$5.23 billion ($674 million) in a 1-for-7 rights offer to pay bank loans and fund capital spending.

The company will sell as many as 471 million new shares at HK$11.10 each, according to a statement to the Hong Kong stock exchange yesterday. Shares in Shangri-La have fallen 27 percent this year. They closed at HK$11.10 on Oct. 22, their last day of trading before the suspension. Hong Kong-based Shangri-La applied for its shares to resume trading in the city today.

Shangri-La said it plans to use about HK$3.9 billion from the rights offer to pay bank loans to save on interest costs and will use the balance as working capital and to fund spending on existing hotels and new projects.

Revenue per available room growth -- a measure of hotel profitability -- in the Asia-Pacific region, where Shangri-La has most of its hotels, was intermittent in 2013 and 2014, Bloomberg Intelligence analysts led by Brian Miller wrote in a Sept. 22 report. Adverse currency exchange shifts in Japan, India and Australia and slowing economic growth in China dragged on the profitability of hotels in the region, according to the report.

China’s economy grew at its slowest pace in July-September period since the first quarter of 2009. 

The government has banned officials from spending money reserved for meetings on banquets or luxury accommodation, as the Communist Party battles public discontent over wasting of public funds.

Source: Bloomberg News by Bonnie Cao 

Destruction caused by the great fire of Shangri-la

Photo taken on January 12, 2014 shows the fire site at the Dukezong Ancient Town of Shangri-la, a resort county in southwest Yunnan province. More than 240 houses were damaged by the fire that started in the early hours of Saturday. The fire has been extinguished and no casualties have been reported as of January 12. The cause of the fire is under investigation. Dukezong, meaning "town of the moon", was built 1,300 years ago and is one of the most renowned resorts in Shangri-la, known for its well-preserved ancient Tibetan dwellings


A man stands on a damaged house burnt during a fire at the Dukezong Ancient Town of Shangri-la, a resort county in southwest Yunnan province, January 12, 2014.


Source: Xinhua

Fire Guts Ancient Town in Shangri-La

Shangri-La, the mythical town of James Hilton’s 1933 novel Lost Horizon, has in the West long summoned visions of a Tibetan paradise.

But on Saturday, part of the tourist district that has laid claim to the name in China’s western Yunnan province was transformed into an inferno after fire spread quickly overnight through wooden houses, according to the official Xinhua News Agency.

Images showed a large part of the ancient town of Dukezong engulfed in flames and by day reduced to charred rubble. The fire, which broke out at 1:30 a.m., was not put out until 10:30 a.m. due to high winds and the large number of wooden structures in town, said Xinhua. It added that there were no immediate reports of casualties.

Authorities are investigating the cause of the fire, which destroyed 100 homes, Xinhua said.

A number of Chinese towns in and around Tibet have claimed the name of Shangri-La to attract tourists. In 2001 Zhongdian county, known by Tibetans as Gyalthang, was renamed Shangri-La in order to better stake a claim as a tourist hot spot. The 1,300-year old town of Dukezong is one of the major attractions in the Shangri-La area.

Over the past decade, the area has attracted growing numbers of Chinese tourists. Dukezong, once an important stop on the Southern Silk Road, is known for its wooden Tibetan houses and narrow cobblestone alleyways. It sits near a larger, modern city which hosts many of the tourists.

The fire is the most recent of a number of blazes that have struck Tibetan areas. Tibetan towns are traditionally filled with wooden structures, making them particularly susceptible to fires during dry winter months when antiquated heating systems are used.

Source: Wall Street Journal by Paul Mozur

Night fire destroys ancient Tibetan town in China's Shangri-la

BEIJING (AP) — A fire that raged for nearly 10 hours Saturday razed an ancient Tibetan town in southwest China that's popular with tourists, burning down hundreds of buildings as fire engines were unable to get onto the narrow streets, state media and witnesses said.

There was no immediate report of casualties, and the cause of the fire was unclear. State media, citing local authorities, said the blaze started in a guesthouse and was ruled accidental.

The fire broke out at 1:27 a.m. in the ancient Tibetan quarter of Dukezong, which dates back more than 1,000 years and is known for its preserved cobbled streets, ancient structures and Tibetan culture. 

It is part of scenic Shangri-La county in Deqen prefecture.

Once called Gyaitang Zong, the county in 2001 renamed itself Shangri-La, hoping to draw tourists by the reference to the mythical Himalayan land described in James Hilton's 1933 novel. Like hundreds of Chinese cities and counties, Shangri-La renovated its old neighborhood, Dukezong, turning it into a tourist attraction filled with shops and guesthouses.

Photos and video footage showed Dukezong and its labyrinth of houses engulfed in flames that turned the night sky red.

The fire destroyed about 242 houses and shops in Dukezong, dislocated more than 2,600 people, and torched many historic artifacts, the official Xinhua News Agency said.

He Yu, a resident, said she woke to loud, explosion-like sounds to find the old town on fire.

"The fire was huge," she said. "The wind was blowing hard, and the air was dry. I was scared because my home is a little distance away from the ancient town. It kept burning, and the firefighters were there, but there was little they could do because they could not get the fire engines onto the old town's narrow streets."

With fire engines kept out, local residents lined up to pass buckets of water to combat the fire, the Deqen prefecture government said.

Most of the buildings were made of wood and the fire spread easily because of dry weather, state-run China Central Television said.

More than 2,000 firefighters, soldiers, police, local officials and volunteers responded to the blaze and brought it under control at around 11 a.m., the Shangri-La county government said.

Source: Associated Press | Photo: Xinhua