TA Global paying RM275.6mil for 4-star Movenpick Karon in Phuket

PETALING JAYA: TA Global Bhd is buying the hotel and business of Movenpick Karon Beach Resort in Phuket, Thailand for US$90.2mil (RM275.6mil) cash.

The property development and investment group told Bursa Malaysia that its wholly-owned subsidiary, Crystal Caliber Sdn Bhd, had entered into a sale and purchase agreement on Wednesday with Kingdom Hotel Investments regarding the Thai hotel.

The four-star hotel has 175 guestrooms, 163 suites and villas and 30 beachfront two-bedroom apartments which are on a 82,828 sq m freehold site.

TA Global also said the hotel had facilities including eight food and beverage outlets, four swimming pools, a spa with seven therapy rooms, a fitness centre, business centre, kids club and in excess of 1,350 sq m of meeting and banqueting space.

The hotel is located about 15km from Phuket town, and is also within a 10-minute drive from Kata Beach and the Patong Beach district.

TA Global will fund the purchase from internally generated funds and external borrowings.

TA Global said the purchase price took into consideration comparable market evidence of earnings multiples.

No valuation has been conducted on the hotel.

Kingdom Hotel Investments had invested US$69.8mil (RM213.4mil) in the hotel in April 2006.

Based on unaudited financial statements as at Feb 29, 2012, the hotel has net assets of US$67.6mil (RM206.6mil) and an occupancy rate of 93%.

TA Global, which owns two hotels in Australia and one each in Canada, Singapore and China, said the Thai hotel deal would enhance the group's hospitality operations in major cities worldwide.

“This will provide steady revenue stream and enhance the revenue contribution from the hospitality division to the group,” it added.

It was also pointed out that Phuket enjoyed a high volume of international visitors and remained one of the most visited destinations in Thailand.

The Phuket International Airport is expanding and by 2014, it will have an annual capacity of 12.5 million passengers which is almost twice its current capacity level of 6.5 million.

The proposed purchase is expected to increase TA Global's gearing ratio from 0.32 times as at Jan 31, 2011 to 0.42 times.

The deal was expected to be completed by the second quarter of the financial year ending Jan 31, 2013, the group said.

By The Star