The company said it plans to spend 35 mln usd expanding the 91-suite resort, with work expected to be completed in the fourth quarter of 2008.
MAS yesterday signed an agreement to sell "Malaysia's most expensive hotel" in terms of average room rate (ARR) and cost per room to Kingdom Langkawi BV, a company affiliated to Prince Alwaleed Bin Talal Bin AbdulAziz AlSaud.
This is Prince Alwaleed's first investment in Malaysia. A sum of RM400 million was agreed for the hotel portion and RM35 million for another 10ha of land.
MAS will gain RM62 million from the sale after taking into account its net assets of RM365.08 million and incidental expenses related to the disposal amounting to RM7.9 million, it said in a statement to Bursa Malaysia.
The sale forms part of MAS's strategic asset rationalisation exercise through the disposal of non-core assets under its Business Turnaround Plan.
The disposal of the building and land measuring 35.64ha is expected to be completed by the third quarter of 2007.
Kingdom is an indirect wholly-owned subsidiary of Kingdom Hotel Investments. The Kingdom Group's principal activity is investment in hotels and resorts comprising development, acquisition, financing and actively managing hotel assets in key city and resort destinations.
The five-star Four Seasons opened in 2005 with MAS then projecting it will recover its investment in the property in about 15 years.
The hotel has a total of 91 villas, each costing an estimated RM4.97 million.
The resort hotel is wholly-owned by MAS subsidiary, MAS Hotels & Boutiques Sdn Bhd. The hotel, managed by Four Seasons Hotels and Resorts, is located on a 19.4ha at Jalan Tanjung Rhu, Langkawi.
It was reported that MAS bought the land for RM80 million.
Sources told Business Times that the hotel enjoyed an average occupancy of 68 per cent in 2006 and charged an average room rate of RM1,900. It made a net profit of RM20 million last year.
According to the hotel's website, the current going rate for a standard room is US$495 or RM1,734 a night.
All 91 villa have patios and a sea view. Twenty units are one- bedroom beachfront villas, each featuring its own spa room.
Last year, MAS completed the sale of the MAS building at Jalan Sultan Ismail for RM194 million.
On Monday, the national carrier announced that for the full year ended December 31 2006, it posted a net loss of RM133.74 million, some 80 per cent lower than its initial forecast of a RM620 million net loss.
Source : Hotels BusinessTimes
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