KUALA LUMPUR — March 15, 2019: Boustead Holdings Berhad is disposing off the Royale Chulan Bukit Bintang Hotel to Singapore-listed Hotel Royal Ltd. for RM197 million in cash.
In a filing with Bursa Malaysia today, Boustead said the group was expected to realise an estimated gain of RM92 million on completion of the deal, translating into about 4.5 sen per share.
BHB’s indirect subsidiary Boustead Hotels & Resorts Sdn. Bhd. today inked an agreement to sell the 418-room four-star hotel to Hotel Royal’s subsidiary Every Room A Home Sdn. Bhd.
A spokesperson said the disposal formed part of the Boustead group’s overall plan to return to profitability by way of divesting non-strategic assets.
The Royale Chulan KL on Jalan Conlay is facing increased competition within the city’s Golden Triangle as well as online platforms such as Airbnb. This resulted in its relatively low occupancy rate of 52 per cent in 2018 versus the average occupancy of hotels in the Klang Valley of about 74 per cent.
The company said that a refurbishment exercise will also be needed for the ageing property to remain attractive and competitive.
Weighing the prospects of maintaining the hotel, the sale offers greater value to the group.
The disposal is conditional on, among others, the buyer obtaining the approval of the Economic Planning Unit and the approval of the KL Land Executive Committee as well as completing all conditions and listing requirements imposed by the Singapore Exchange Securities Trading Ltd.
The proposed sale is expected to be completed by July. — Bernama