A firm linked to Saudi Prince Alwaleed bin Talal has agreed to buy the hotel and boutique unit of Malaysian Airline System (MAS) for $124 million, the carrier said.
The sale, which includes the Four Seasons Hotel in Malaysia, comes as the state-controlled Malaysia Airlines unloads non-core assets to help turn around the once-ailing airline.
An indirect subsidiary of Kingdom Hotel Investments, a firm affiliated to Alwaleed, will pay RM435 million ($124 million) to buy the hotel business, Malaysia Airlines said in a statement.
The carrier said it stood to gain RM62 million from the sale, which is expected to be completed by the end of the third quarter. The sale ‘forms part of MAS’ strategic asset rationalisation exercise,’ the airline said. Malaysia Airlines recently posted its second straight quarterly profit, ending a run of five loss-making quarters in the third quarter on better yields and cost cutting.
The Four Seasons Hotel in Langkawi, comprises 91 suites and villas and is located on a 1.4 km stretch of pristine beach. The hotel occupies a 35-hectare site and opened in May 2005. KHI intends to expand the resort by adding an additional 20 keys and developing 14 luxury villas that will be sold as Four Seasons Residences. The expansion and development is expected to cost $35 million and be completed in Q4 2008. Set on Langkawi’s Northern cape, the resort will be KHI’s fourth venture in Asia. It follows the acquisition of a land lease for the development of a Raffles resort near Da Nang (Vietnam) in January 2007, the Mِvenpick Karon Beach Resort in 2006, and the announcement earlier this year of a land acquisition for the development of a Raffles hotel in Phang Nga near Phuket (Thailand).
Prince Alwaleed bin Talal bin Abdulaziz Alsaud, chairman of KHI, said, “We continue to see considerable potential in the Asian region, demonstrated through the acquisition of this prime asset in an area of growing tourist activity.”