Fresh off its announcement last week of a plan to streamline its loss-making hotel division, City Developments Ltd has named two new directors to the CDL board, including an old Asia hand with nearly five decades of hospitality experience.
The Singapore-listed developer appointed veteran Daniel Desbaillets and investment consultant Chong Youn Chou as non-executive and independent directors, with effect from 20 November. Their selection comes after non-executive and non-independent director Kwek Leng Peck stepped down from the board a month ago after more than three decades in the role.
Kwek, the cousin of chairman Kwek Leng Beng, left CDL after taking issue with some of the company’s decision-making, including its approach to managing its wholly-owned hospitality arm, Millennium & Copthorne Hotels (M&C).
Familiar Face at the Table
Desbaillets, 70, has worked in the hospitality industry since 1973, serving in senior positions at M&C, as well as at Hilton, Fullerton, Shangri-La and InterContinental Hotel Group, where he spent 24 years and was president and chief operating officer of Asia Pacific for six years until his departure in 2003.
Desbaillets was M&C Asia Pacific’s COO for two years until 2005 and later sat on the London-listed hotel group’s board before its privatisation by CDL in November 2019. He currently is focused on the food and beverage industry in Singapore, where he serves as chairman of Singapore-based SaladStop Pte Ltd and FreshCreation Holdings Pte.
Chong, 52, brings experience in managing assets and funds, having led the equity investment team at Aberdeen Asset Management Ltd and managed $380 billion worth of funds at Ostrum Asset Management Asia Ltd. Chong spent 22 years at Aberdeen and then two years at Ostrum before leaving in 2019 to found Leanne Capital Pte Ltd, a Singapore-based family office and investment consultancy.
Righting the Ship
The pair of appointees join a board of directors facing a host of challenges, including making sense of CDL’s contentious China investment, navigating what remains of the COVID-19 crisis and restoring the M&C hotel portfolio to profitability. CDL’s hotel division reported a pre-tax loss of S$208.2 million ($155.1 million) for the first half of 2020.
According to CDL’s interim financial report, just 28 percent of M&C’s hotels were operational as of 30 June as the pandemic wreaked havoc in the hospitality industry.
CDL had the misfortune of completing a buyout and privatisation of M&C last November, one month before the coronavirus outbreak began upending the hotel industry. In that takeover, the Singaporean developer paid £776 million ($989 million) for the remaining 34.8 percent of M&C it did not already own.
As part of a streamlining strategy of narrowing its geographic scope and offloading assets, M&C is “reviewing its global footprint” and assessing at least three offers, the company said last week. The goal is to reap gains such as the S$26.4 million that M&C earned from the S$49 million sale of the Millennium Cincinnati in February.
CDL in April agreed to pay RMB 4.39 billion (then $621 million) to buy a 51 percent stake in Chongqing-based developer Sincere Property Group, but has since had to support the mainland firm as it faces ongoing losses. In leaving the board last month Kwek Leng Peck had also mentioned the Sincere deal among his disagreements with the other directors. Early this month CDL appointed an affiliate of financial advisory firm Deloitte to review its relationship with Sincere.