- The recovery of the hospitality sector in the UK, arising from the relaxation of lockdowns and the reopening of borders for international travel, presents an opportune time for Atlan to enter the hospitality sector in the UK.
KUALA LUMPUR (Oct 20): Atlan Holdings Bhd is buying a property in the UK and its asset management company for a total combined value of RM58.83 million.
Atlan said in an announcement on Bursa that it is purchasing The Cornwall Hotel Spa & Estate — a four star hotel located at St Austell in Cornwall — from Belle Isle Property Ltd (BIP) for £10.8 million (equivalent to RM57.5 million), to diversify into GBP-based assets and generate income from foreign-based assets, after the cessation of its hospitality operations in Kuala Lumpur due to the Covid-19 pandemic in 2020.
Additionally, Atlan is also buying all of BIP’s existing assets and liabilities related to the operations with an aggregate net asset value of RM107,706, to minimise any disruptions to hotel operations, as well as costs required to furnish the hotel anew.
The acquisition of the hotel and its assets and liabilities is deemed to be related party transactions, in view of the interests of Datuk Seri Adam Sani Abdullah, Atlan’s executive chairman and major shareholder who is also deemed interested in BIP by virtue of his interest in Chesterwood Ventures Ltd.
Further, Atlan is also acquiring the management company that has been managing The Cornwall Hotel since 2014. Atlan inked an agreement with Mark Trevor Rudrum to buy Belle Isle Hotels (Cornwall) Management Ltd (BIM) for RM1.33 million.
Both acquisition of the hotel, as well as the management company, will be funded via internally-generated funds and/or bank borrowings, said the company.
The recovery of the hospitality sector in the UK, arising from the relaxation of lockdowns and the reopening of borders for international travel, presents an opportune time for Atlan to enter the hospitality sector in the UK.
“Both domestic and international travel is expected to pick up and is expected to benefit the hotel’s occupancy rates and revenue per available room. However, the management of Atlan expects recovery in the near term to be slow, due to, among others, rising inflation and cost of living,” it said in a bourse filing.
Nevertheless, Atlan believes that the proposed acquisitions will benefit the group over the longer term and contribute positively to the group’s earnings in future.
The proposed acquisitions are expected to be completed in the second quarter of 2023.
Atlan’s shares were up six sen or 2.07% at RM2.96 on Thursday (Oct 20), giving it a market capitalisation of RM750.81 million.