Tropicana Corporation Bhd has entered into a sale and purchase agreement with IOI PFCC Hotel Sdn Bhd and Flora Development Sdn Bhd in relation to the Proposed Disposal of W Hotel KL for a total cash consideration of RM270million.
IOI PFCC and Flora Development are indirect subsidiaries of IOI Properties Group Berhad.
W KL comprises of 25-storey, 150 hotel rooms together with hotel facilities and 346 car park bays, located adjacent to the junction of Jalan Ampang and Jalan P. Ramlee, near the Petronas Twin Towers and Suria KLCC in Kuala Lumpur.
The original cost of investment in W KL is approximately RM364.01 million comprising the purchase consideration of approximately RM43.45 million for the land which was completed in year 2010; and year-to-date (“YTD”) development costs as at 31 October 2023, amounting to approximately RM320.56 million.
Tropicana said the proposed disposal represents an opportunity for Tropicana Group to immediately unlock the value of its investment asset, namely W KL, as the Disposal Consideration translates to price per key of approximately RM1.80 million, and it is expected to provide an estimated net pro forma gain on disposal of approximately RM7.41 million.
The Proposed Disposal will also give the group approximately RM270 million in proceeds, and with such proceeds, after deducting incidental expenses related to the Proposed Disposal, to be utilised by Tropicana to amongst other, fully repay W KL’s existing bank borrowings and improving its gearing level.
The group views the sale will able it to improve its financial performance and realise a gain, and strengthen its cash flow position.
