Fairmont Hotels & Resorts Inc, Kingdom Hotels International (Kingdom) and
Bank of Scotland Corporate, a division of HBOS plc announced today that
they have formed a joint venture to invest in luxury hotels in key
European markets. The joint venture will have a potential buying capacity of pnds stlg 800
million (US$1.5 billion) and will be equity funded 50% by Bank of
Scotland, 25% by Fairmont and 25% by Kingdom. The partners anticipate
making equity contributions of up to pnds stlg 200 million (US$390
million). The hotels acquired by the joint venture will be managed by
Fairmont and Bank of Scotland will provide debt financing for the joint
venture. Cedar Capital Partners will serve as managers and investment
advisors for the joint venture.

The joint venture’s first investment is the purchase of the Monte Carlo
Grand hotel in Monaco, a 619-room landmark property on one of the most
coveted stretches of the Cote d’Azur. The purchase of the hotel by the
joint venture has been completed and the property will be flagged “The
Fairmont Monte Carlo” in March 2005. The new owners expect to invest US$50
million in refurbishment.

“We are delighted to extend our relationship with Kingdom and Bank of
Scotland through this joint venture,” said William R. Fatt, CEO Fairmont
Hotels & Resorts. “Coming on the heels of our agreement to manage London’s
Savoy Hotel on completion of sale, this agreement marks another important
milestone in the global expansion of the Fairmont brand and adds Monte
Carlo to our list of world renowned Fairmont hotel destinations.”

“As a long-term investor in Fairmont and Fairmont hotel properties, we
believe our joint venture’s focus on European luxury hotel acquisitions is
an excellent strategic choice for growth,” said HRH Prince Alwaleed bin
Talal bin AbdulAziz Alsaud, Chairman of Kingdom.

Peter Cummings, Managing Director Bank of Scotland Corporate added, “We
are very confident in the expertise and capacity of our joint venture
partners to command a strong presence in Europe and develop the properties
acquired to the very highest standards of quality and financial
performance.”
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