This article first appeared in The Edge Financial Daily on February 28, 2019 - March 6, 2019

KUALA LUMPUR: In a surprise turn of events, the defence ministry (Mindef) yesterday said that offers are still being considered for Royale Chulan Bukit Bintang Hotel and that the valuation process is still underway.

The ministry appears to be refuting an announcement by Boustead Holdings Bhd on Feb 19 that its wholly-owned subsidiary, Boustead Hotel & Resorts Sdn Bhd, has accepted an offer from Singapore-based Hotel Royal Ltd to buy the hotel for RM197 million.

Boustead, which is owned by the Armed Forces Fund Board (LTAT), had made the announcement in a filing with Bursa Malaysia.

But Mindef, in a statement yesterday, said it “wishes to clarify that the sales process for the Royale Chulan Bukit Bintang Hotel is yet to be concluded”.

It added that the valuations are still ongoing in light of the hotel’s strategic location as one of the main tourist spots and hotel zones in the centre of Kuala Lumpur.

“Therefore, the best offers from interested buyers are being considered, with priority given to local companies,” added Mindef.

Last December, The Edge Malaysia weekly, quoting a Boustead spokesman, reported that the company was seeking bidders for the 21-year-old hotel, which occupies two parcels of freehold land measuring 3,189 sq m.

In its Feb 19 filing, Boustead said Hotel Royal was granted a one-month exclusivity period to conduct due diligence on the hotel as stipulated in the letter of offer. Additionally, Boustead agreed to refrain from providing responses, other than rejections, to other enquiries and offers from other bidders during the one-month exclusivity period.

Hotel Royal had also paid RM3.94 million as a 2% earnest deposit on the sale price, Boustead said. If the sale and purchase agreement is not executed, the earnest deposit would be fully refunded to Hotel Royal within a fortnight from the date of its written refund demand to Boustead.

Yesterday’s statement from Mindef also comes at a time when the ministry is in the news over alleged politically motivated land deals carried out under the previous Barisan Nasional rule.

Earlier this month, Mindef said government funds in excess of RM500 million was believed to have been leaked via 16 of the ministry’s land swap deals.

Boustead’s share price closed two sen or 1.35% lower at RM1.46 yesterday with a market capitalisation of RM2.96 billion.