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Chelsfield Buys Out TrizecHahn Stake in Troubled Global Switch Venture

LONDON-Canadian developer TrizecHahn has cut its losses in the Global Switch Internet hotel venture and sold its stake to its partner Chelsfield of the UK for £35 million ($50 million).

By Graham Parker | Updated on March 20, 2002

LONDON-Chelsfield has emerged as the sole owner of the troubled Internet hotel venture Global Switch after resolving its dispute over valuations with its partner Trizechahn. Chelsfield has agreed to pay £35 million ($50 million) for TrizecHahn’s 47.2% stake.

Under the terms of the agreement, TrizecHahn will receive 11.4 million new Chelsfield shares in exchange for its investment in Global Switch, and another 8.1 million shares in exchange for an existing $36 million loan from TrizecHahn to Chelsfield. This will leave TrizecHahn holding approximately 6.9%of Chelsfield’s equity.

TrizecHahn President and CEO Christopher Mackenzie said: ‘We’re pleased to have reached this agreement. Following conclusion of the sale to Chelsfield, we will have eliminated all direct exposure to Global Switch, and we will be further able to focus on our core U.S. office portfolio. Because Chelsfield is one of the leading operators in the U.K. real estate market, we are optimistic that this will be a profitable investment for us.’

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