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Boustead to dispose of Royale Chulan Bukit Bintang

19 Feb 2019 / 20:46 H.

PETALING JAYA: Boustead Holdings Bhd is disposing of the Royale Chulan Bukit Bintang Hotel (pix) and its business in Kuala Lumpur to Singapore’s Hotel Royal Ltd for RM197 million.

The conglomerate told Bursa Malaysia that its wholly owned subsidiary Boustead Hotel & Resorts Sdn Bhd (BHR) had on Feb 19 accepted an offer from Hotel Royal via its letter dated Feb 15 for the deal.

Hotel Royal is listed on the Main Board of Singapore Exchange Securities Trading Ltd (SGX).

Royale Chulan Bukit Bintang is a four-star hotel with 400 rooms. It is one of the eight hotels under the group’s hotel portfolio.

“There are currently two Royale Chulan hotels in Kuala Lumpur – Royale Chulan Bukit Bintang and Royale Chulan Kuala Lumpur, which are both within close proximity and competing with each other. As such, the Group has decided to consolidate and focus on one hotel, namely Royale Chulan Kuala Lumpur, to better capture the Kuala Lumpur market,” said Boustead.

“Royale Chulan Bukit Bintang offers good prospects, given its strategic location in one of the prime tourist areas and hotel belts of Kuala Lumpur’s city centre. With this attractive offer price, we are of the view that this is the right time to dispose of this hotel,” it added.

The letter of offer is subject to, amongst others, Hotel Royal being granted an exclusivity period of one month commencing from Feb 19 to conduct a due diligence exercise on the hotel; BHR shall refrain from responding to (other than to reject) any enquiry, discussion, proposal or offer for or to continue, propose to, negotiate or hold discussions, and/or enter into any agreements, arrangements or understanding with any other parties during the exclusivity period.

It is also subject to the execution of a conditional sale and purchase agreement (SPA) by the parties within the exclusivity period; and the conditions precedent for the proposed disposal will include, inter alia, the statutory and regulatory approvals required under the Malaysian law and the SGX.

Boustead said Hotel Royal had paid a sum of RM3.94 million, being the 2% earnest deposit of the disposal consideration, as part of the terms of the letter of offer.

“In the event that the SPA is not executed for any reason whatsoever, the earnest deposit shall be refunded in full to the purchaser within 14 days from the date of the purchaser‘s written demand to BHR.”

Boustead said it will make the necessary announcements upon further development of the proposed disposal.

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