KUALA LUMPUR (March 31): Aseana Properties Ltd, a London-listed property developer in which Ireka Corp Bhd has a 23% stake, is selling the Aloft Kuala Lumpur Sentral Hotel in Malaysia (Aloft Hotel) to Prosper Group Holdings Ltd for RM418.7 million (US$104.6 million).
At current exchange rates, Aseana will record a gain of approximately RM138.72 million (US$35.9 million) from the proposed disposal.
According to its filing on London Stock Exchange yesterday, the gross transaction value of RM418.7 million includes the purchase of the entire issued share capital of ASPL M3B Ltd and Iringan Flora Sdn Bhd and assumption of certain debts, assets and liabilities of the Aloft companies.
It said the disposal is conditional upon satisfactory completion of a due diligence review by Prosper Group, and on consents from Starwood Asia Pacific Hotels & Resorts Pte Ltd, being the operator of the Aloft Hotel.
Aseana said the proceeds from the disposal will be used to fully repay the medium-term notes (MTNs) issued for the Aloft Hotel, and to partly repay the MTNs issued for the Harbour Mall Sandakan and Four Points Sheraton Sandakan Hotel.
"Upon repayment, the company's net gearing will be reduced to 0.48 times from 1.12 times, based on unaudited accounts as at Sept 30, 2015," it added.
Aseana noted that it will continue to liaise with its lenders in respect of the first intended capital distribution of RM38.64 million (US$10 million) and will engage further with the lenders to seek consents for this capital distribution following completion of the disposal.
The property developer, which focuses on the Malaysian and Vietnamese markets, targets to complete the transaction in the third quarter of 2016.
Developed by Aseana, the Aloft Hotel is a 482-room hotel located in KL Sentral. It achieved an occupancy rate of 79% in 2015.
Commenting on the disposal, Aseana chairman Datuk Mohammed Azlan Hashim said the disposal of the Aloft Hotel is a significant milestone in the company's divestment strategy.
"This transaction also highlights the strength of our company in developing highly sought after real estate investment assets.
"The company remains fully committed to returning capital to shareholders and will work closely with its lenders to enable distributions to be made at the earliest possible opportunity," he added.
Aseana shares closed up 2 US cent or 3.75% to trade at 42 US cent on Wednesday, for a market capitalisation US$87.99 million. Ireka's shares were untraded today. The stock last closed at 50 sen on March 29, bringing a market cap of RM85.44 million.