Why IGB is weighing a sale of the Renaissance Kuala Lumpur Hotel

(Renaissance Kuala Lumpur Hotel)

In spite of seeing its net profit for the first quarter of the year drop 20.5 percent, IGB Corp. is taking its time in reaching a decision on the potential sale of its 20-year-old Renaissance Kuala Lumpur Hotel.

"We just got an offer from a party and we are still reviewing the offer," group managing director, Datuk Seri Robert Tan Chung Meng, said, declining to share any further details beyond saying that the company has not signed any agreement.

A source told The Sun Daily that the group is in talks with a Singapore company for the possible sale of the hotel for almost RM800 million.

If the sale goes through, Tan said, the group will use the proceeds to fund its Mid-Valley Southkey Megamall project in Iskandar, Johor.

"We won't have to borrow so much for the Southkey project. We're talking about RM1 billion there," he said. "It's not a secret that we've been looking for a buyer for that hotel because it is not yielding. Whatever assets that's not yielding we are trying to dispose of and put the money to better use." 

IGB's net profit declined to RM51.8 million for the first quarter from RM65.14 million a year ago, thanks to lower contributions from its property development and property investment divisions. Revenue for the quarter fell 16 percent to RM280.2 million from RM334.3 million a year ago.

Source: The Sun Daily