Sime seeks buyer for hotel

By BUSINESS TIMES

In a move to sell non-core businesses, the conglomerate has put up Hotel Equatorial Melaka for sale at an estimated RM180 million

Conglomerate Sime Darby Bhd (4197) has put up for sale its decade-old hotel in the heart of historical Malacca.

The five-star 496-room Hotel Equatorial Melaka will probably be sold for an estimated RM180 million, or roughly RM363,000 per room, sources told Business Times.

The sale is said to to be in line with Sime Darby’s intention to sell non-core businesses.

Hotel Equatorial Melaka is owned by Syarikat Malacca Straits Inn Sdn Bhd, in which Sime Darby holds 55 per cent and the Malacca state government 30 per cent. The rest is held by Hotel Equatorial (M) Sdn Bhd, which is also the operator.
Sime Darby officials were unavailable for comment.

Sources close to the deal said that Zerin Properties has been appointed as the exclusive agent for the sale. Zerin Properties could not be reached for comment.

A source, who disclosed that several offers have been received for the property, said the agent was hopeful of completing the deal by the year-end.

If Sime Darby got its asking price, based on its interests, it could get as much as RM99 million from the sale.

It is believed that the hotel, with average occupancy of more than 60 per cent and average room rate of RM180 per night, made some RM37 million revenue in its last financial year.

Its earnings before interest, tax, depreciation and amortisation last year stood at around RM11 million.

Malacca, the third most visited state after Kuala Lumpur/Selangor and Penang, was proclaimed a World Heritage Site by the United Nations Educational, Scientific and Cultural Organisation (Unesco).

Last year, it welcomed 7.2 million tourists. It projects 8.4 million arrivals this year. By 2010, it hopes to attract 13 million tourists.

Hotel Equatorial Melaka, located in Bandar Hilir, is a 22-storey building with three basement floors for parking. It has seven food and beverage outlets and a ballroom seating capacity of 1,300.

The hotel is within walking distance of the A Famosa fort and the Stadthuys.

According to a Sime Darby website, its hospitality involvement includes the PNB Darby Park Executive Suites in Kuala Lumpur, Harvard Suasana Hotel in Kedah and Darby Park Executive Suites in Singapore.

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