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Friday, December 17, 2010

Mulpha sells Hilton Melbourne for RM327mil

Hilton Melbourne Airport Hotel

PETALING JAYA: Mulpha International Bhd will use the RM327mil proceeds from the sale of its Hilton Melbourne Airport Hotel to repay its debt levels unless new investment opportunities arise.

Executive chairman Lee Seng Huang, in an e-mail reply to questions from StarBiz, explained: While we have no current use of the proceeds, we will repay our outstanding facilities as much as possible. But if and when an opportunity comes up, we can redraw our loan facilities to make an acquisition. This is part of our treasury management to ensure we maximise returns on our cash resources.

In a statement to Bursa Malaysia yesterday, Mulpha said that the proceeds, if used to repay debts, could bring down the group's debt levels from RM1.5bil to RM1.18bil.

To recap, yesterday Mulpha said it's wholly-owned subsidiary Mulpha Australia Ltd, had sold the Hilton Melbourne Airport Hotel to Singapore-listed Pan Pacific Hotels Group for A$108.89 (RM337.5mil) cash, with the sale expected to be completed by the first quarter of next year.

Mulpha said the hotel was acquired in June 2004 at a cost of A$40mil (RM120mil) as part of a larger acquisition of a portfolio of properties.

The disposal of Hilton Melbourne Airport Hotel crystalises the embedded asset value in this investment which has significantly appreciated in value since the acquisition in 2004. During this time, the hotel performed exceptionally well and has won numerous awards. The sale will result in a one-off pre-tax gain of A$77mil (RM238.6mil) for the group, Lee said in a statement.

The Hilton Melbourne Airport Hotel is a six-level, four-and-a-half star hotel comprising 276 rooms on a 6,630 sq m land.

Mulpha other assets in Australia include the five-star InterContinental Sydney, a resort-styled property development called Sanctuary Cove in northern Gold Coast and Hayman, a five-star private island destination on the Great Barrier Reef.

Mulpha also owns 25% of Australian-listed FKP Property Group, the largest private owner/operator of retirement villages in Australia and New Zealand. All these assets were acquired by Mulpha Australia between 2002 and 2004.

FKP and Mupha were recently in the news in Australia over rumours that the former's second-largest shareholder, Stockland a leading Australian property developer was seeking to take over FKP.

Lee had then said that Mulpha was not keen on selling its shares in FKP as there was still a lot of upside potential in it. In an earlier interview with StarBiz, Lee also said that Mulpha was inclined to reinvest its profits.

Mulpha's investment philosophy is to maximise the value of its assets and recycle that money into other assets that can generate more value,'' Lee said.

By The Star

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