News

The Board of Directors of ASB wishes to announce that Asbina Hotel & Property Sdn Bhd (“AHP”) has on 22 September 2015 entered into a Termination of Lease Agreement with Monoratanak Construction Co., Ltd (“Monoratanak”) and Canadia Bank PLC to terminate the Lease Agreement dated 31 January 1996 (“Lease Agreement”) entered into between AHP and the Municipality of Phnom Penh, the Kingdom of Cambodia (“MPP”) where MPP leased to AHP a piece of land located on the corner of Preah Monivong Boulevard and Street No. 118, Sangkat Monorom, Khan 7 Makara, Phnom Penh, consisting of an existing building known as Hotel Monorom (now known as Holiday Villa City Centre Phnom Penh) (“Hotel”) together with the land adjacent to the rear (hereinafter the existing building and the adjacent land shall together be referred to as “the Land”) for a cash consideration of USD1,250,000 (equivalent to approximately RM5.4 million) (“Consideration”) (“Proposal”).

AHP has been informed via a letter from the Director of Phnom Penh Municipality Department of Economy and Finance that MPP has sold the Land to Monoratanak subject to the Lease Agreement.

Under the Lease Agreement, AHP has right to operate the Hotel for a period of 70 years up to 31 January 2066 for a lease rental of USD60,000 to USD192,000 per annum and will construct a new hotel on the vacant land located behind the Hotel (“New Hotel Construction”). The New Hotel Construction plan has not been given approval since the submission of the plan to MPP in 2008. The hotel market condition in Phnom Penh remains soft and the mushrooming of 3-star hotels along Monivong Boulevard impacts the room rate of the hotel market.

In view of the above, AHP intends to exit the Phnom Penh market and the Proposal provides for an early termination of the lease with the new owner, Monoratanak.

The Consideration was derived at after taking into consideration amongst others the remaining annual lease rental payable by AHP and the operating results of the Hotel. AHP has received a sum of USD250,000 as earnest money and the remaining balance of USD1,000,000 shall be paid to AHP by Canadia Bank PLC.

With the Proposal, there will be a one-off provision for the writing off of the net book value of the assets of the Hotel amounting to approximately RM15.1 million as at 31 December 2014.

However, the operations of the Hotel Group is not expected to be materially and adversely affected by the Proposal.

None of the directors, major shareholders and/or persons connected with the directors and major shareholders of ASB has any interest, direct or indirect, in the Proposal.

This announcement is dated 22 September 2015.