KUALA LUMPUR: The majority shareholders of hotel operator Grand Central Enterprises Bhd
(GCEB) have proposed to take the company private and de-list it from the Main Market of Bursa Malaysia for 46 sen per share.
In a filing with Bursa Malaysia today, GCEB said the proposal was made by Tan Chee Hoe Sons Sdn Bhd (TCHSSB) and Hotel Grand Central Ltd, which collectively hold a 72.65 per cent stake in the company.
TCHSSB is a major shareholder of GCEB through its 48.8 per cent direct equity interest and 23.79 per cent indirect equity interest in GCEB, while Hotel Grand Central is a major shareholder of GCEB through its 23.79 per cent stake.
Hence, TCHS and Hotel Grand Central intend to acquire the remaining 53.87 million shares in GCEB not already held by them for 46 sen per share.
GCEB owns five hotels in Kuala Lumpur, Langkawi, Kuantan, Kuala Terengganu and Kuching under the Hotel Grand Continental brand.
The hotel operator and its subsidiaries have been recording losses for the past 10 consecutive financial years up to the financial year ended Dec 31, 2023 (FY2023) and the latest three-month financial period ended March 31, 2024.
As a result of the weak financial performance, GCEB Group has not declared any dividend since FY2019.
In addition, GCEB Group’s hotels have an average building age of 31 years and have recorded a low occupancy rate of approximately 24 per cent in 2024.
"Given the conditions of these hotels, a refurbishment is necessary to maintain standards and attract guests to improve the financial performance of GCEB Group.
"Based on the foregoing and after taking into consideration the rise in labour costs and prices of goods, paired with a new supply of hotel rooms and intense competition from new hotels within the vicinity, we expect GCEB Group’s upcoming performance and earnings visibility to remain tough moving forward,” it said.
GCEB shares have been thinly traded, with a simple average monthly trading volume of 182.937 shares for the past year up to July 19, 2024, being the last trading day before the date of this proposal, which represents a liquidity turnover of approximately 0.35 per cent.
"Given the limited trading activity in GCEB, the exit offer provides an opportunity for holders of the offer shares to realise their investment in GCEB immediately at the offer price,” it added.
Trading in GCEB shares was suspended today with the last traded at 37 sen per share. - Bernama
