Loss-making Quality Hotel Shah Alam to be shut down

SHAH ALAM: Kumpulan Perangsang Selangor Bhd (KPS), a subsidiary of Kumpulan Darul Ehsan Bhd (KDEB), is shutting down its loss-making, four-star hotel here on June 1.

Quality Hotel Shah Alam currently occupies seven floors of Plaza Perangsang, which is a major landmark here. The building is owned by KPS and houses its headquarters. The hotel will later be converted into office space and put up for rent.

The hotel is KPS’ third, in addition to Quality Hotel City Centre and Brisdale International Hotel in Kuala Lumpur.

KPS head of public relations, media and corporate social responsibility Amin Lin Abdullah told The Edge Financial Daily via email yesterday that the hotel was being closed down due to eroding profitability.

“The profitability of the hotel had been eroding and in some years it had incurred losses even with prolonged subsidised rental rates that are substantially more favourable than market rates.

“Hence, the management has no alternative but to effect the closure of Quality Hotel Shah Alam permanently,” he said.

“The floors occupied by the hotel are being planned for redevelopment into office space for rent.”

A two-month notice had been given to the hotel management and staff prior to its closure on March 31, said Amin Lin.

At a press conference yesterday, Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim said the state government does not interfere in the decision-making process of its government-linked companies although the state government is a majority shareholder of KDEB, which owns 61% of KPS.

He  also assured that the decision made by KPS to shut down the hotel would have taken into account the welfare of the employees affected by the closure.

KPS shares yesterday closed down 1.25% or two sen at RM1.58, giving the company a market capitalisation of RM788.4 million.

This article first appeared in The Edge Financial Daily, on April 3, 2014.


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