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Oriental buys Kingsley Hotel
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By Ben Shane Lim of theedgeproperty.com
Friday, 03 February 2012 15:50 Bookmark and Share

KUALA LUMPUR (Feb 3): Oriental Holdings Bhd has acquired the Kingsley Hotel in central London for a cash consideration of £42.71 million (RM203.9 million) on Thursday.

This marks one of the biggest acquisitions by the RM3.3 billion market cap company in recent years and comes at a strategic time with the upcoming Olympic Games in London.

In an announcement to Bursa Malaysia on Thursday, Oriental said its wholly-owned subsidiary Kah Motor Company Sdn Bhd had entered into a sale and purchase agreement with Curzon Hotel Properties (GP) Ltd, The Curzon Hotel Properties Ltd Partnership and Curzon Hotels (Operator) Ltd for the acquisition of "the Kingsley hotel, its business, the lease and the assets in London".

The London property in question comprises a freehold land with the six-storey Kingsley Hotel on it with a total built-up of about 71,000 sq ft. The Kingsley Hotel commands a four-star rating and has 129 en suite bedrooms, a brasserie restaurant, bar and lounge together with seven meeting rooms.

The hotel is strategically located in central London's midtown district, near Covent Garden and New Oxford Street and is in close proximity to two underground stations — Holborn (Piccadilly Central Line) and Tottenham Court Road (Central Line).

Oriental said the funding for the £42.71 million acquisition will be internally generated by Kah Motor and the deal is expected to be completed by the end of the first quarter.

Oriental added that no valuation had been carried out on the property and therefore the new book value of the property cannot be disclosed as it is not known. Nonetheless, it said based on the property's earnings before interest, tax, depreciation and amortisation in 2011, the purchase price translates into a yield of 5%. Oriental will not assume liabilities from the acquisition.

The acquisition will cater for the expansion of the group's hospitality division, said Oriental, which nevertheless noted that the slowing global economy including that of Europe and the UK could be a material risk to the acquisition.

Oriental's largest shareholder is Boon Siew Sdn Bhd, with a 43% stake in the company, which has interests in plantations, automotive sector, property development and others. Oriental and Boon Siew were founded by the late Tan Sri Loh Boon Siew.

Oriental closed unchanged on Thursday at RM5.28, with 150,700 shares traded. The stock has risen sharply by 22.8% from a low of RM4.30 in November due to renewed investor interest in its growing plantation operation in Indonesia.

 

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