Nomad unit buys Penang hotel

KUALA LUMPUR (Sept 5): Nomad Group Bhd's wholly-owned unit has proposed to pay RM25 million for 100% of Bella Varia Sdn Bhd, which undertakes hotel operations and rents commercial space in Grand Paradise Hotel in George Town, Penang.

"The proposed acquisition represents an opportunity for the group to increase its hospitality assets base and to expand its geographical location to include Penang," the company said in a statement on Tuesday, adding that the purchase price took into consideration the "comparable market value of similar properties".

Grand Paradise Hotel — a nine- storey two-star hotel with 96 rooms along Jalan Macalister — is built on a 13,278 sq ft land with a net book value of RM11.9 million, the company said.

Nomad's unit Nomad Properties Sdn Bhd will assume the RM9.04 million outstanding loan owned by Bella Varia to Bank Perusahaan. There are no other material financial commitments apart from the purchase price and renovation costs which are yet to be determined.

Bella Varia made a net loss of RM98,932 for the year ended March 31, 2011 and its net assets stood at RM2.64 million. The sellers are Datuk Pardip Kumar Kukreja Gurbachan Singh and Datuk Abdul Halim Abdullah, who own 40% and 60% of Bella Varia respectively.

The deal, expected to be completed by Oct 1, is not expected to have a material impact on earnings for the year ending Dec 31, 2012 but could boost future earnings, said Nomad. The deal will be funded with a mix of internal cash and borrowings.

This article appeared in The Edge Financial Daily on Sept 5, 2012.

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