Mulpha International Bhd expects a higher contribution to group revenue from its Australian investments next year.
Executive chairman Lee Seng Huang said the group expected the contribution from Australia to go up from the present 80% of total revenue to between 85% and 90% due to its hotel investments in that country.
“For 2005, I think it will go up to 85% to 90% because of our recent acquisition of hotels,” he told reporters after the signing of an agreement for the issuance of RM100mil Islamic private debt securities (PDS) in Kuala Lumpur yesterday.
“Obviously hotels are revenue intensive businesses so there will be a big jump in revenue. We have already seen it in the third quarter of this year.”
For the third quarter ended Sept 30, the group recorded a net profit of RM2.5mil on revenue of RM427mil.
On Mulpha's revenue growth for the financial year ending Dec 30, Lee said the company expected a significant growth of “probably between 15% and 20%.”
He said the group expected its borrowings to be pared down to less than 20% of total assets within three to four months.
“Currently our gearing is about 30% to 40% of our assets. Within the next couple of months, that will be brought down tremendously because of the disposal of three of our assets,'' he added.
Lee said Mulpha had signed contracts with several parties for the disposal of three of its smaller assets worth a total of over A$200mil.
“We should have completed the disposal of Novotel Century Sydney Hotel today,” he said, adding that the proposed disposal of Sheraton Brisbane Hotel and the Sydney Opera House car park would be completed by early next year.
Mulpha's wholly-owned subsidiary and investment arm in Australia, Mulpha Australia Ltd (MAL), owns six hotels – Sheraton Brisbane Hotel, Hyatt Sanctuary Cove Hotel, Novotel Century Sydney Hotel, Intercontinental Hotel Sydney, Melbourne Airport Hotel and Hayman Island Resort. Besides the Sydney Opera House car park, it also operates the Cathedral Street car park.
The book value of the group's total assets is under RM4bil.
On the RM100mil PDS, he said the proceeds would be utilised to refinance its existing borrowings and the remainder for working capital.
“We anticipate to settle our conventional loans of about RM80mil,” he said, adding that the Group estimated that the interest savings would be about 1%, or at least RM1mil a year.
The RM100mil PDS comprises a RM75mil Murabahah commercial paper (CP) or medium term notes (MTN) facility guaranteed by a RM75mil syndicated Kafalah (bank guarantee) facility and RM25mil Murabahah commercial paper or medium term notes facility.
The guaranteed Murabahah CP/MTN facility is fully underwritten by AmMerchant Bank and jointly guaranteed by the AmBank Group and Southern Bank Bhd while the Murabahah CP/MTN facility is fully underwritten by Amanah Short Deposits Bhd.
Mulpha will be able to lock in the interest rate during the availability period of up to seven years of the programme via long term fixed rate instruments under the Islamic PDS.
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