Had dinner with some analyst friends from banks. This topic about MUI disposing the profit making Corus Hyde Park pop out and coincidently one of the analysts just done an analysis on this.
Planned selling price: GBP200mil @ RM1 billion
This analyst friend says based on the facts gathered, MUI Group is currently servicing around RM850mil to RM900mil bank loan. And half of the loan(around RM450mil) is taken by Corus Hype Park. If this disposal is successful, then the RM1 billion cash will be left RM550mil. And of the balance of cash (RM550mil) is also expected to be used to pare down remaining bank loan in order to lower down the existing finance cost.
Special dividend maybe declared as rumored. It may likely that this special dividend declaration is to help senior khoo to pare down his existing high personal loan with a local bank.
Some cash also may likely need to be channelled into its existing which is bleeding badly (e.g. metrojaya, etc) or cash tight (e.g. Local Corus, etc)
After all these, not much cash should be left. The group is talking about lifestyle business. How good will be lifestyle biz in the next 3 to 5 years considering the Malaysian economic situation to allow consumers too spend on lifestyle. Can these lifestyle biz fill up the profit vacuum left by Corus Hyde Park?
So, the question, what will actually happen to stock price then? Will it be a sustaining price? Let’s wait and see.
I will look at mui from assets angle...Andrew has ambitious for Mui to be an asset light company... they may put up others asset like ampang properties and springhill lands for sale
“We appointed Rothschild as we wanted to do a proper exercise in which we could the derive the actual market value for the asset and realise the best possible price,” Khoo said.
He also revealed to the weekly that before Rothschild’s appointment, MUI “received an offer of slightly more than £200 million (RM1.07 billion) from an interested party”.
“It’s been more than a year since I took over, and my father has left [the group] in my hands to help drive the business in a new direction,” Khoo said.
“From my perspective, I need to look at the group on a holistic level. When we unlock an asset [of this magnitude] we can reinvest in other [ventures]. The ultimate purpose is to drive further value for our stakeholders.”
According to the business publication’s report, MUI is open to sale options: “whether an outright sale, or a sale and potential leaseback in which the management of the hotel is still retained” by the group.
“At this stage, it is still too early to say, but we are looking at identifying a buyer within the next three to four months. Since the appointment of Rothschild two weeks ago, there has already been some interest expressed,” Khoo explained.
Understand from my contacts in UK, as potential buyers are aware that it has now reached a very desperate stage to offload the hotel, they are now pressing the price down to take advantage of the situation.
Considering the fact that the bank owing are so sky high, after paying off some of the repayments pressured by the banks and coupled with potential dividends payout due to “certain specific reasons” as speculated, how much would be left to be re-invested back to the business? On a larger context, from its annual report, noted that this hotel is one of the very few profitable businesses the group has, what could immediately fill up this profitability gap after its disposal if it does take place?
If continue so, no hope. After paying off some of the bank owings, the balance of owings are still very high. Selling of asset is only to repay bank owings to stay afloat. Even venture into lifestyle biz also no hope. No point having such a big group of companies when most of them are bleeding badly. Better bite the bullet, divest those bleeding business, slim down the group into a much smaller group. Focus the available resources in those few profitable business.
I fully agree with golfstick. Why MUI still want to continue with so called lifestyle biz? In UK and here too we see company closing down retail shops and department stores. It is not a growth biz. Neither MUI has skill and competitive advantage running hotels.
Wao ! MUIIND share price up now even report quarter result loss. Maybe its london corus hotel found a buyer. If hotel able sell at price rm 2 bil, Muiind share price can hit 30sen easily.
The boy and the wolf story.... after few times tat the market got cheated by KKP, they loss confidence about MUI selling Corus Hyde Park and turnaround story. But looking to the way Andrew doing deal and his execution, i think is very likely tat Corus Hyde Park to be sold and greater prospect is ahead for MUI. I think he is a fair guy and willing to listen to minority, working hard to turnaround MUI to former glory. I am positive with him and think special dividend is expected...
Metrojaya, 2nd floor at Mid-Valley- selling some sort old primitive antiques from Thailand at thousands. If china dynasty antiques, may have some interest. Why Metrojaya sell all these rubbish? wakaka...anyway, I'm still holding tight this Ah Moi...wakaka
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Posted by multi530 > 2019-05-01 19:05 | Report Abuse
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