MALAYAN United Industries Bhd (MUIB) has unveiled plans to transform the Corus Hyde Park Hotel in London into an upper-scale four-star international brand with the aid of a newly accepted £152.5 million term-loan facility through its subsidiary, Plaza On Hyde Park Limited.

The loan, structured into four tranches, includes £87.3 million for refinancing, £38.0 million for redevelopment from July 2024 to October 2025, £4.5 million for contingency, and £22.7 million for working capital, backed by a corporate guarantee from LVH, a subsidiary.

The hotel, located in London’s Lancaster Gate, aims to enhance competitiveness against newer, more luxurious properties amidst increased competition.

The redevelopment seeks to significantly raise average room rates and achieve over 80% occupancy, foreseeing a substantial increase in post-redevelopment net operating profit.

However, the group’s borrowing will rise by approximately £69.1 million (approximately RM423.7 million), potentially increasing interest expenses by around £13.4 million (approximately RM82.6 million) for the fiscal year ending June 2025, resulting in an expected additional loss per share of 2.56 sen.

Despite this, Tranche B of the loan is expected to positively impact future earnings.

The loan facility is anticipated to reduce net assets per share from 31 sen to 29 sen and increase the gearing ratio from 0.71 times to 1.11 times for the fiscal year ending June. –TMR