Tropicana Corp sells its hotel in Penang to IOI Properties unit for RM165 mil

KUALA LUMPUR (Jan 26): Tropicana Corp Bhd has proposed to sell its Courtyard by Marriott Penang Hotel for a total cash consideration of RM165 million, to a unit of IOI Properties Group Bhd, confirming The Edge report last month.

In a statement on Friday, the property developer said its wholly owned subsidiary, Tropicana Macalister Avenue (Penang) Sdn Bhd has entered into a sale and purchase agreement with IOI PFCC Hotel Sdn Bhd — an indirect subsidiary of IOI Properties — for the proposed disposal. 

Tropicana highlighted the proposed disposal is aligned with the group’s ongoing initiatives to monetise its landbanks and investment properties, reduce its net gearing and improve its financial position.

“Over the past few months, the group reported a string of positive news, from its successful sukuk redemption, higher revenue jump to multiple award triumphs. 

“We are confident that the group will continue to strengthen its market presence and contribute to its future earnings supported by high unbilled sales of RM2.3 billion and strong take-up for ongoing projects. Our mission is to transform Tropicana into a future-ready property group with a strong purpose of sustainable growth, centred around our development DNAs and ESG commitments. 

“We have strategic divestment plans that we are confident of achieving and will continue to roll out effective sales campaigns to drive growth, especially emphasising our digital and online initiatives and customercentric engagements,” its management shared. 

Following the disposal, the group is expected to have a surplus cash of approximately RM80.8 million. 

It added, the group remains optimistic and is confident that there will be continuous demand for properties in prime locations in Tropicana’s established, matured, and developing townships. 

To recap, in early December last year, Tropicana disposed of its W Hotel in Jalan Ampang, Kuala Lumpur to property developer IOI Properties for RM270 million cash. 

The deal is expected to provide the group an estimated net pro forma gain on disposal of RM7.41 million.

Shares in Tropicana Corp finished two sen or 1.55% lower to RM1.27, giving it a market capitalisation of RM2.92 billion.