ECM Libra Group has announced a strategic joint venture and two new hotel management contracts with Singapore-based TP Real Estate Holdings Pte Ltd (TPRE), a wholly owned subsidiary of Plato Capital Ltd, under which TPRE will acquire a 50% stake in Ormond Group Sdn Bhd (OGSB), currently a wholly owned subsidiary of ECMLG.
Under the agreement, TPRE will subscribe for 12.5 million new ordinary shares in OGSB for a cash consideration of RM100,000, resulting in both parties holding equal 50:50 stakes in the company upon completion.
The transaction is expected to be completed within one month.
As part of the joint venture, OGSB will gain access to the “Ormond” and “Momo’s” hospitality brands through a sublicensing arrangement from Plato, while continuing to manage the “Tune” hotel brand.
Separately, OGSB has signed two hotel management agreements covering Ormond Hotel Sandakan and The RuMa Hotel and Residences in Kuala Lumpur.
The agreement with ICSD Ventures Sdn Bhd covers hotel management services for Ormond Hotel Sandakan, while a separate agreement with The RuMa Hotel KL Sdn Bhd involves the management of The RuMa Hotel and Residences.
Both contracts have an initial tenure of two years with an option to renew for a further two years upon mutual agreement.
Under the agreements, OGSB will receive recurring management fees comprising a base management fee and an incentive management fee, with the Ormond Hotel Sandakan contract also including licence and marketing fees.
The company estimates total fees payable under the two hotel management agreements during the initial two-year period at approximately RM7.85 million.
Datuk Lim and ECMLG Chief Executive Officer Gareth Lim Tze Xiang, who is also a director of Plato and TPRE, abstained from deliberating and voting on the transactions.
