The Imperial Crown Hotel in Halifax was one of two hotel properties sold by MUI in the first quarter of this year
PETALING JAYA: Loss-making but asset-rich Malayan United Industries Bhd
(MUI) has sold two of its hotels under the Corus brand in the UK, proceeds of which went for loan repayment and working capital.
In response to StarBiz queries a spokesperson from MUI confirmed that it has sold The Old Golf House Hotel in Outlane, West Yorkshire and The Imperial Crown hotel in Halifax.
“We confirm that Corus Hotels Ltd, a subsidiary of MUI, has sold the 52-room Old Golf House Hotel in Huddersfield, and the 40-room Imperial Crown Hotel in Halifax. “The sale was completed in the first quarter of this year.”
The sale of the hotels for an undisclosed sum went largely unnoticed locally and was first reported by UK press late last year
The spokesperson said the sale was not reported to Bursa as the combined sale value was below the trigger point for announcement.
Whether the sale could lead to more divestments, the spokesperson said that among its hotel properties in the UK, those two were identified as non-core.
“Proceeds from the sale were used for loan repayment and working capital by the hotel group.
“However, hotels will remain as a core business activity for the group,” he added.
MUI had bought the two properties 17 years ago and in its 2017 annual report they carried a net book value (NBV) of RM14.42mil.
Going by this, it would have made a made a tidy return from the disposals, reckon industry observers.
Despite owning a plethora of good assets, MUI has been loss-making.
In the recent second quarter ended Dec 31, 2017, it made a net loss of RM8.70mil versus RM22.02mil recorded in the same period a year ago.
Total borrowings as at that period stood at RM883.46mil, while cash was at RM188.07mil.
For FY ended June 30, 2017, it recorded losses amounting to RM131.7mil on the back of RM415.1mil revenue.
The flagship of one-time corporate high-flyer Tan Sri Khoo Kay Peng, MUI has investments in various businesses including retail, hotels, food and property.
Among its crown jewels, London-listed Laura Ashley Holdings plc which Khoo controls just under 50% of, is one of MUI’s most prized assets.
Under its hotel division, MUI owns and operates a string of hotels in the UK and two hotels in Malaysia under the Corus brands.
The Old Golf House Hotel in Outlane, was bought in 2001 and had a net book value (NBV) of RM8.27mil in MUI’s 2017 annual report.
The Imperial Crown Hotel at Halifax meanwhile had a net book value of RM6.15mil.
The group’s flagship hotel in the UK is known as the Corus Hotel Hyde.
This hotel sits on 21,640 sq ft of freehold land and carries a current net book value (NBV) of only RM257.5mil.
It is unclear when this piece of land was last revalued.
Locally, MUI’s Corus Hotel in Jalan Ampang is situated opposite the Petronas Twin Towers and carried a NBV of RM54,50mil in its books.
From the beginning of this year, Kay Peng relinquished his role of chief executive officer at MUI to his son Andrew Khoo Boo Yeow as part of a succession plan.
The tycoon remains the group’s executive chairman.
At the time of writing, MUI's share price was down half a sen or 2.78% to 17.5 sen apiece.
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