Magma unit to acquire LUMA Hotel and adjoining buildings in KK for RM60.9 mln

KUCHING (March 6): Magma Group Bhd’s wholly-owned subsidiary Magma Avenue Sdn Bhd (MASB) is acquiring the LUMA Hotel and four adjoining buildings in Kota Kinabalu for RM60.9 million to expand its hospitality portfolio.

In a filing to Bursa Malaysia, the group said MASB had entered into a heads of agreement (HOA) on March 5 with several vendors for the proposed acquisitions, which involve both equity interests and property assets linked to the hotel’s operations.

The transaction includes the acquisition of 100 per cent equity interest in HH Home Hotel Sdn Bhd for RM12.8 million.

The purchase will be settled through a combination of cash and the issuance of 27.15 million Magma shares at an issue price of 33 sen each.

HH Home Hotel is the company that manages the LUMA Hotel and owns its trademark.

The deal also includes four contiguous buildings where the hotel currently operates at Sutera Avenue.

The four adjoining buildings, each comprising 10 shop offices and retail units, will be acquired from various owners for RM48.1 million, payable through cash and newly issued shares.

Overall, the RM60.9 million purchase consideration will be satisfied through RM30.64 million in cash and RM30.26 million via the issuance of about 91.7 million new Magma shares priced at 33 sen each, based on the five-day volume-weighted average price prior to the signing of the agreement.

Under the terms of the HOA, MASB will place an earnest deposit of RM1.8 million, equivalent to about three per cent of the total purchase consideration, within five business days of signing the agreement.

Magma said the proposed acquisitions will allow the group to take ownership of both the hotel operations and the premises, strengthening its position in the hospitality segment.

“By investing in a hospitality asset with strong growth potential, the group aims to strengthen its recurring income stream from the hotel segment, which is the group’s core business activity,” it said.