Kumul Hotels Ltd completed the sale of Crowne Plaza Hotel, Port Moresby, to a wholly-owned subsidiary of HTS Holdings Ltd on Friday.
The KHL board could not disclose the information about the total cost of the completion of the sale.
KHL first announced its intention to sell the Crowne Plaza in 2016.
Advisors were appointed to market the hotel to potential domestic and overseas purchasers though a public sales campaign.
A lengthy sale process was conducted, that has been examined by separate external advisers and found to be robust and arms-length.
The directors of KHL consider the sale to be in the best interests of the company having regard to a number of considerations including:
- Sale price was compelling in the current market and in excess of a number of other confirmed offers received by the company for the hotel;
- sale will enable KHL to pay down debt and ensure compliance with its covenants under loan arrangements with its banks and to potentially trade more profitably;
- KHL considered that significant investment would be required to undertake a major refurbishment of the hotel if it was to remain in company ownership; and
- Management of the Crowne Plaza is provided by the international hotels management group, IHG, who formally advised KHL they did not intend to continue as manager of the hotel beyond the end of January next year.
It is unlikely that another international manager would have been interested in replacing IHG on terms acceptable to KHL.