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Wednesday, December 19, 2007

Stronger presence for Tradewinds Corp Bhd (TWC)

KUALA LUMPUR: Tradewinds Corp Bhd (TWC) is looking to build a stronger presence in the hotel and property development markets after a proposed de-merger involving a restricted offer for sale of its 53% stake in Tradewinds (M) Bhd to TWC shareholders and an acquisition of 907 acres of prime development land in the Iskandar Development Region (IDR).

If approved by shareholders and the authorities, the exercise will help TWC, among others, to reduce its current debt of RM2.45bil to RM1.03bil, and give it sufficient financial resources for its hotels and to undertake major property development projects.

TWC chairman Datuk Seri Megat Najmuddin Megat Khas said the exercise would put the group in a much stronger financial position and pave the way for its future growth.

“At present, TWC has four major core businesses – plantations, sugar manufacturing, property investment and development, and hotels. Through the de-merger, TWC will emerge as a more focused entity.

“With greatly reduced debts, our property development and hotel businesses will become the major drivers of future group profits,'' Najmuddin told StarBiz.

TWC's chain of nine hotels stretches from Penang to Kuching and Hanoi in Vietnam. Some of its prominent hotels are Hilton Petaling Jaya, Crowne Plaza Mutiara Kuala Lumpur and Hotel Istana.

Tradewinds Hotels & Resorts Sdn Bhd chief executive officer Shaharul Farez Hassan said although occupancies and the average room rates at the group’s hotels had improved over the past few years, “the competition out there is still very tough.”

“The overall costs have gone up in tandem with room rates, and it's getting very hard to recruit good staff or keep existing experienced ones,'' Farez said..

Datuk Seri Megat Najmuddin Megat Khas

TWC also owns two prime investment properties in Kuala LumpurMenara Tun Razak in Jalan Raja Laut and Kompleks Antarabangsa in Jalan Sultan Ismail. The two buildings generate over RM24mil in rental income a year.

In previous years, TWC’s property development was limited to two joint ventures with a Johor developer. Recently, the group decided to expand its property development activities to take advantage of rising income among Malaysians and the various attractive incentives offered by the Government for the property sector.

Towards this end, the group has started to build up its own capability in this area.

P.K. Poh, who retired as group managing director of Dijaya Corp Bhd early this year after 15 years, was appointed TWC adviser and director.

According to Poh, the proposed acquisition of the IDR land was only the beginning of the group’s property development journey and plans were under way to develop more projects over the next few years.

“We will also be venturing into other major and iconic projects, particularly in Kuala Lumpur. We hope to take full advantage of the IDR land, which has a potential gross development value of more than RM2bil,” he added.

Another property veteran who joined TWC recently is Cheah Wing Choong, who has been appointed its chief operating officer.

“These are interesting times for the TWC group, and I’m truly excited about the prospect of helping the management team in the proposed transformation of TWC into one of Malaysia’s blue-chip developers,” said Cheah.

Poh said the new management team was looking forward to recruiting a more capable and experienced core staff over the next few months and, together with the existing TWC staff who are looking after the investment properties and hotels.

By The Star (by Angie Ng)

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