This article first appeared in The Edge Financial Daily on February 20, 2019

KUALA LUMPUR: Boustead Holdings Bhd is disposing of its Royale Chulan Bukit Bintang Hotel business to Singapore-based Hotel Royal Ltd for RM197 million.

Boustead’s wholly-owned unit Boustead Hotel & Resorts Sdn Bhd accepted the offer to sell from Hotel Royal yesterday, the group informed in a filing.

In December, The Edge Malaysia weekly wrote, quoting a Boustead spokesman, that the group was seeking bidders for the 21-year-old asset, which is located on two parcels of freehold land in Kuala Lumpur measuring approximately 3,189 sq m.

Yesterday, Boustead said Hotel Royal has been granted an exclusivity period of one month to conduct a due diligence on the hotel as part of the terms in the Letter of Offer.

Additionally, Boustead shall refrain from responding — other than to reject — to any enquiry or offer from any other parties during this exclusivity period.

“The purchaser 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,” it said.

If the sale and purchase agreement is not executed for any reason, the earnest deposit shall be refunded in full to Hotel Royal within 14 days from the date of its written demand to Boustead.

Boustead shares slipped one sen to close at RM1.47 yesterday, with a market capitalisation of RM2.98 billion. The stock’s value has about halved over the past one year.