Second bid called for Tajudin Ramli-linked Langkawi assets

KUALALUMPUR: Investors keen on the 136-room five-star Tanjung Rhu Resort and the 1,000 acres (404.7ha) surrounding it in Langkawi will get a second shot at the assets worth an estimated RM2 billion.

The receivers and managers (R&M) of Tanjung Rhu Land Sdn Bhd and Reka Intisari Sdn Bhd — two companies linked to former corporate high-flyer Tan Sri Tajudin Ramli — have again called for expressions of interest (EOI) for the luxury resort and the land surrounding it following a failed last minute attempt by the debtor to settle the debt.

Deloitte Corporate Solutions Sdn Bhd was the appointed R&M by Bank Pembangunan last May to recover monies owed to the bank. Yeoh Siew Ming and Lim Keng Peo of Deloitte are currently operating the hotel as a going concern.

Citing confidentiality, Deloitte declined to comment when asked the reasons behind the second EOI, following the first, held last October.

Sources said the assets had received encouraging response from local and foreign investors including listed entities and well known hotel operators.

The Edge Financial Daily was given to understand that a winning bidder was not finalised as the debtor had subsequently negotiated with Bank Pembangunan to settle the amount due. According to a source, the bank had given Tanjung Rhu Land and Reka Intisari until July to settle the monies owing but as the companies failed to do so, the assets were back on the market.

Running a second round may be able to draw new parties and more competitive bids. According to an advertisement which appeared last weekend, R&M are seeking an EOI to either acquire the resort on an “as if, where is” basis, or to submit other proposals, for R&M’s consideration. The closing date for the EOI is Oct 1.

A source who decided to not bid in the first round told The Edge Financial Daily that the R&M’s preference was to dispose of both the resort and surrounding land, probably because the amount owed to the bank is more than the value of the hotel, but less than the two assets combined.

Nevertheless, at least two separate sources said that many parties were only interested in the hospitality asset and submitted their EOI solely for it.

Last June, The Edge Malaysia weekly reported that in 2015, a valuer valued the hotel and land held by the two companies at around RM2.8 billion. Over the years, the owners are said to have received direct offers to buy the hospitality asset from various parties too. The resort itself is said to occupy only 20 acres of the entire available land.

Meanwhile, a search on the Companies Commission of Malaysia website shows that Tanjung Rhu Land is 80% owned by Kauthar Venture Capital Sdn Bhd and 20% by Kedah State Development Corp.

The latest available accounts for Tanjung Rhu Land are for the financial year ended Dec 31, 2014 (FY14), and show its total liabilities amounted to RM138.95 million while total assets were at RM1.58 billion. Its directors are Abdul Halim Abdullah, Abdul Rahman Ibrahim, Fazlan Azri Tajudin and Abdul Rahman Abdullah.

As for the resort operator Reka Intisari, Tanjung Rhu Land owns two shares in the company, while Kauthar Venture Capital Sdn Bhd holds 0.3% and Kauthar Inc Sdn Bhd 99.70%. Reka Intisari has also not filed its accounts since FY14. As at end FY14, Reka Intisari’s total liabilities stood at RM102.78 million and its accumulated losses at RM48.06 million. It had total assets of RM120.92 million.

Meanwhile, Kauthar Venture is owned by Fazlan & Amal Sdn Bhd (99.9%) and Tajudin Ramli (0.1%).

The shareholders of Fazlan & Amal Sdn Bhd are Fazlan Azri Tajudin, Amal Nadiah Tajudin, Fazlan Atfi Tajudin and Amal Najmin Tajudin, each owning an equal share in the company, while Tajudin Ramli and Faridah Abdullah together hold one share.

As for Kauthar Inc, its shareholders are Wan Adlan Affandy Wan Abdul Rahman, Fazlan Azri and Fazlan Atfi — each owns a third of the company.

Tajudin Ramli was a prominent corporate figure in the 1990s as he controlled Malaysian Airline System Bhd (MAS), Naluri Bhd and Celcom (M) Bhd. In 1994, he bought a 32% stake in MAS for RM1.8 billion, reportedly by acquiring the shares held by Bank Negara Malaysia on behalf of the government after the central bank suffered massive foreign exchange losses, as a result of its aggressive positions on the foreign exchange market. As for Tanjung Rhu Resort’s history, it can be traced back to 1984 when Promet Bhd, with the support of the government, proposed to develop 1,000 acres in Tanjung Rhu as an international tourism spot.

The resort itself was originally built as an apartment complex in 1991. In 1992, the current owners bought the property and converted it into a hotel and engaged Radisson Hotels & Resorts Group as the operator. Seven years later, the group hired a local company to take over the operations.

Source: TheEdgeMarkets