MUIIND selling its London Corus Hotel at price RM1.1 Billion.  MUIIND share price break 16sen resistance and moving toward 20sen. 

MUIIND inherent value in the group.

MUI’s Corus Hotel in Jalan Ampang, sitting on 78,500 sq ft of prime land opposite the Petronas Twin Towers, is carried at a net book value (NBV) of only RM60.5 million, or RM770 per sq ft (psf), whereas land in the KLCC vicinity had reached as high as RM3,000 psf.

Nevertheless, the main appeal of MUI lies in its chain of hotels in the United Kingdom that have not been revalued for many years.

Notably, its crown jewel, the 390-room hotel known as Corus Hotel Hyde Park at Lancaster Gate, London, which sits on 21,640 sq ft of freehold land, is carried at a NBV of only RM257.5 million. MUI acquired the property in 2001.

It would appear that Khoo is finally looking to sell Corus Hotel Hyde Park. If the sale materialises, analysts said, the “surplus” of close to RM800 million could serve to pare down MUI’s total borrowings of RM893.5 million as at June 2014, and “finally let its profits shine through”.

Such hefty borrowings, compared to the group’s total equity of RM762 million (excluding minority interests), resulted in a finance cost of RM52.6 million in the financial year ended December 2013, which wiped out a majority of MUI’s RM54.9 million operating profit.

Meanwhile, a surplus of close to RM800 million could also double MUI’s shareholders equity to RM1.56 billion or 53.3 sen a share, from 26 sen per share currently. MUI was traded at 25.5 sen last Friday, with a market capitalisation of RM747.8 million.

“Khoo is now 75 years old. It is a matter of time [before] he wants to unlock the value of assets in MUI, clean up its books, and leave a good legacy,” said an analyst, who added that MUI is also looking to dispose of some of the restaurants in the UK.

MUI owns and operates nine hotels and two restaurants in the UK and two hotels in Malaysia, most of which operate under the “Corus” brand.

Apart from the hospitality business, MUI controls 94.52% of department store operator Metrojaya Bhd, 35.17% of London-listed Laura Ashley Holdings plc (market capitalisation of £195.8 million), and major stakes in MUI Properties Bhd, Pan Malaysia Corp Bhd (foodstuff manufacturing), Pan Malaysia Holdings Bhd (diversified), Pan Malaysia Capital Bhd (stockbroking and financial services) and so on.

On its London assets, property market observers said it won’t be difficult for MUI to fetch £200 million for Corus Hotel Hyde Park, given upbeat investors’ sentiments on London hotels, especially with growing interest from wealthy Chinese investors as well as sovereign wealth funds in the Middle East.

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