KUALA LUMPUR: Property company IGB Corporation Bhd's unit Great Union Properties Sdn Bhd (GUP) is selling its Renaissance Kuala Lumpur Hotel to Ventura International Sdn Bhd for RM765mil as it unlocks its business assets at a favorable price.
IGB said on Monday it is expected to make a gain of RM85mil net of tax for FY ending Dec 31, 2017, which would improve the net assets per share and earnings per share by six sen.
It said the hotel was completed and started operations in mid-1996. The original cost of investment in hotel was RM506.6mil.
“The hotel had been revalued in previous financial years and the accumulated revaluation surplus net of tax of approximately RM140mil had been credited to GUP’s retained earnings. Based on GUP’s latest audited financial statements as at Dec 31, 2015, the net book value of the hotel was RM667.2mil,” it said.
IGB intends to utilise the proceeds for working capital and to support its continued growth for suitable acquisitions or investments when such opportunity or opportunities arise.
“Business assets contributed approximately 8% to the group’s revenue for the FY ended Dec 31, 2015. GUP’s contribution to the group revenue and pretax profit for the past three FYs ended Dec 31, 2013, 2014 and 2015 were RM108.5mil, RM103.9mil and RM93.7mil respectively, and RM4.6mil, RM600,000 and net loss of RM7.9mil respectively,” it said.
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