Proceeds from disposal, which will result in a one-off pretax gain of A$77 million for the seller, will be used to reduce Mulpha's debts, the company informed Bursa Malaysia on Thursday.
"The hotel is being disposed of to realise the significant appreciation in its value since our acquisition in 2004," Mulpha said.
The company had acquired the hotel then at A$40 million.
Mulpha said the hotel was charged for a syndicated loan facility of A$250 million. The four-and-a-half star 276-room Hilton Melbourne, which opened for business in 2001, is currently run by Hilton Hotels of Australia Pty Ltd.
The disposal also includes the transfer of the lease for the 6,630 square metre land on which the six-storey hotel sits to Pan Pacific. The tract is currently leased to Mulpha by airport operator, Australia Pacific Airports (Melbourne) Pty Ltd.
The selling price of A$108.89 million translates into a price-to-book multiple of 3.4 times the hotel's net book value of A$32 million. The price also represents a price-to-earnings multiple of 34 times its profit afer tax of A$3.2 million in financial year ended Dec 31, 2009.
Mulpha said the disposal, which is subject to approval from Australian authorities, is expected to be finalised by the second quarter of next year. According to Mulpha's latest quarterly financials, the company had a cash pile of RM322.52 million versus debt obligations of RM1.18 billion as at Sept 30 this year, translating into a net debt of RM860 million.
In its website, the company claims to be the largest Malaysian property investor and developer in Australia. Its portfolio there includes the Sanctuary Cove, and Hyatt Regency Sanctuary Cove in Queensland, InterContinental Sydney, and Hayman Great Barrier Reef.
Meanwhile, Pan Pacific said in a separate statement to the Singapore Exchange that it intended to rebrand the hotel under the group's Parkroyal banner. It is already the owner of three hotels in Australia, namely, the Parkroyal Darling Harbour, and Parkroyal Parramatta in Sydney, besides the Sheraton Perth.
"The acquisition is part of Pan Pacific's plans to expand its hotel property portfolio and hotel management businesses in the Oceania region and it views a presence in Melbourne as an important strategic commitment.
"The acquisition is also expected to enhance the collective operating efficiency of the Pan Pacific Group's three other hotels in Australia, through economies of scale and greater brand awareness," said Pan Pacific, adding that it will finance the purchase via its internal funds and bank loans.
TOP PICKS BY EDGEPROP
Cheras Condo (0 Entry Cost+Pay U RM1k Every Month)
Cheras, Kuala Lumpur
Nearby Airport , Best Choice For Cabin Crew& Pilot
Ready Tenant, Confirm Rental Get Up To Rm3000
BEST KL Condo Promo Package [Free Furnished KLCC]
KL City, Kuala Lumpur
Bangsar 5-star condo [Rent To Own] Walk to Mall
Bangsar, Kuala Lumpur
Peaceful Area ,Good For Ownstay & Investment
Segambut, Kuala Lumpur
Imperial Jade Residenz @ Bandar Seri Alam
Amara Boulevard and Service Residences
[Mid Valley Condo] Price Drop 50%+RM90k CASH BACK
Mid Valley City, Kuala Lumpur
Twin Key Project Surround by University & Malls
KL Sentral, Kuala Lumpur
Youth City @ Nilai Best Investment Township Condo
Nilai, Negeri Sembilan
LUXURY CONDO WITH INFINITY POOL,1st HOME BUYER
[Investor] Bandar Sunway Concept Subang Condo
Subang Jaya, Selangor
[BEST BUY]Invest 650sqft Condo Price Drop
Desa Parkcity, Kuala Lumpur
Welcome Investor, Confirm Rental Beside Famous Uni
Country Heights Kajang (Taman Bukit Impiana)
Country Heights, Selangor
0 booking fee FOR condo Beside UNIVERSITY
Bukit Jalil, Kuala Lumpur
2 Sty Semi D Tmn Tasik Semenyih, Semenyih