Last week, IGB Corporation sold the 921-key Renaissance Hotel Kuala Lumpur (Renaissance KL) to Ventura International Sdn Bhd for RM765 million. A conditional sale and purchase agreement (SPA) was signed between IGB Corp’s wholly-owned subsidiary, Great Union Properties Sdn Bhd, and Ventura International. The hotel commenced operations in mid-1996 with an original investment of RM506.6 million and as at 31 December, 2015, the audited net book value of the asset, which includes all buildings, structures, plant, machinery and equipment as well as fitting, furnishings and fixtures, was RM667.2 million. As a result of the disposal, IGB Corporation expects to make a gain of RM85 million net of tax for the fiscal year ending December, 2017, which would improve its net assets per share and earnings per share by six sen. IGB intends to utilise the proceeds for working capital and to support its continued growth for suitable acquisitions or investments when such opportunity or opportunities arise. After the announcement of the proposed disposal, shares of IGB rose by 1.56% in early trade on 16 August.
HVS APAC HOSPITALITY NEWSLETTER.