KUALA LUMPUR: Hospitality and leisure operator Only World Group Holdings Bhd (OWG), en route to listing on the Main Market of Bursa Malaysia on Dec 18, said works to revitalise the 65-storey Kompleks Tun Abdul Razak (Komtar) tower in Penang is “on track” to be completed by the third quarter of next year (3Q15).
“The current progress is at 50%. It is on track and we are targeting to complete the renovation and refurbishment exercise by 3Q15. The financial results will be reflected in our book for financial year ending June 30, 2016 (FY16),” its managing director and group chief executive officer Datuk Richard Koh Cheng Keong (pic) told reporters after launching OWG’s prospectus for the initial public offering (IPO) here yesterday.
OWG aims to raise RM50 million through the issuance of 56.41 million new shares or 30.49% of its enlarged issued capital at an offer price of 88 sen per share, giving it a market capitalisation of RM162.8 million. The group is slated to be the 13th and last company to list on Bursa Malaysia this year if it is successfully listed next month.
Koh said OWG plans to use 60.44% or RM30 million of the proceeds raised to fund part of the RM60 million cost of refurbishing Komtar to make it a new tourist attraction.
“OWG will refurbish five floors of the tower to create high-end commercial space suitable for events such as wedding ceremonies, corporate functions, fashion shows, trade fairs, exhibitions, seminars and conferences,” he said.
Koh said Komtar, the tallest building in Penang, is a “diamond waiting to be polished”, and that OWG is optimistic of the revitalisation project, given that some 5.5 million tourists are expected to visit Penang annually.
He also noted that the refurbishment of Komtar has allowed OWG to penetrate a new geographical market, as the bulk of its current operations are mainly in the Klang Valley and Genting Highlands.
Meanwhile, Koh said 26.19% or RM13 million of the IPO proceeds will be used to expand its business, of which RM10 million will be allocated to open 10 new food and beverage outlets. The remaining RM3 million will be used to expand its water amusement park in Shah Alam, Selangor.
“Of the 10 new F&B outlets, five will be in Genting Highlands, three in Penang and two in Putrajaya. We expect to obtain the licence to operate in Putrajaya early next year,” Koh said.
Currently, OWG operates 27 such outlets, with 20 in Genting Highlands, three in Selangor, two in Johor and one each in Negeri Sembilan and Sarawak. In FY14, food services contributed 71.36% or RM59.29 million to its total revenue of RM83.08 million.
On the expansion of its water amusement park in Shah Alam, Koh said the second phase of the park’s upgrade should start in 2015 and be completed in the same year.
Besides Shah Alam, OWG has water-based theme parks in Pedas, Negeri Sembilan and Batu Pahat, Johor. All three parks contribute 12.41% or RM10.31 million to the group’s total revenue. On average, OWG receives 2,500 visitors to its water amusement park in Shah Alam and 1,500 each in Pedas and Batu Pahat.
Koh has a 83.74% stake in OWG, while his wife Datin Chew Lean Hong holds the remaining 15.64%. After the listing exercise, their shareholdings will be diluted to 69.08%, held through Rich Dad Cafe Sdn Bhd.
This article first appeared in The Edge Financial Daily, on November 27, 2014.