TA Enterprise Going Extremely Big Into Properties

Was looking through several recent news clip on TA Enterprise.

• TA completes buy of The Westin Melbourne
  Written by Financial Daily
  Wednesday, 22 April 2009 00:02
  
  KUALA LUMPUR: TA Enterprise Bhd said on April 21 the group has completed the acquisition of a hotel, The Westin Melbourne, after fulfilling all conditions and completing its obligations under the sale and purchase agreement.
  
  The acquisition of the hotel in Collins Street, Melbourne was carried out via its subsidiaries TA Covenant Pty Ltd and Ascents Hotel Pty Ltd.

On Star Business.

• Saturday May 16, 2009
  TA unveils Canadian hotel
  By THEAN LEE CHENG
  
  TA Enterprise Bhd will officially open its Aava Whistler Hotel in Canada, after a C$33mil refurbishment, making this its first hotel on Canadian soil. It has two hotels in Australia, which are also undergoing refurbishment this year at a total cost of about A$4mil.
  
  Its group managing director and chief executive officer Datin Alicia Tiah says the company will be on the lookout for other hotel acquisitions over the next two years with a preference for those in the central business districts (CBDs) in large cities, particularly in Hong Kong and Singapore.
  
  Tiah says she ventured into the hotel business in 1997 by default. In retrospect, there are no regrets, she says.
  
  The Radisson Plaza heritage building needed a bit of work but the effort is well worth it.
  
  The global downturn has resulted in a 10% to 15% drop in room rates and occupancy for its Sydney hotel.
  
  Despite that, the Radisson contributed about 15% to the group’s revenue in financial year 2008 and 2009.
  
  TA bought the Sydney hotel for A$115.5mil. Radisson generated sales of RM73mil in 2007, RM82mil in 2008 and is expected to bring in RM77mil in the current financial year which ended on Jan 31.
  
  “I learnt a lot of things from that first project – the operations and management of a hotel business, the long gestation period and the importance of recognising an opportunity when it comes,” Tiah says. Although she likes hotels in CBDs, Tiah remains open to opportunities in different categories of the hospitality industry.
  
  “We purchased the Coast Whistler because I know the place. I go there for my skiing holidays and I am familiar with the area and the hotel business there. Most of them have multiple owners who lease the units back to the operator.
  
  “With Coast Whistler, it was different. It was a little boutique hotel with about 190 rooms and there were no multiple owners,” she says.
  
  Located at the base of world’s renowned Whistler and Blackcomb Mountains in British Columbia, the Coast Whistler is popular with winter sports enthusiastics. Since the purchase, she has renamed it Aava Whistler Hotel. It will be opened in time to tap the winter Olympics in February 2010, using the same strategy as its Radisson Plaza hotel in Sydney.
  
  TA bought the Canadian hotel for C$33mil at the height of the global downturn in December 2008.
  
  TA will also be operating its sole food and beverage outlet, White Spot, a franchised chain fairly similar to TGIF.
  
  “Upon acquisition, the hotel business needs two to three years to be profitable. But because there is always a demand for rooms during the Olympics – in Sydney in 2000 and in British Columbia in 2010 – we are able to tap into that market the first year charging premium rates. We will do well for the first year because of these major events and we’ll just let the second and third years look after themselves,” says Tiah.
  
  In April, the group concluded its Westin Melbourne deal at a cost of A$160mil.
  
  Tiah says the 262-room five-star luxury hotel is a jewel in terms of location. It is sited at the corner of Collin and Swanston streets. Its occupancy in March was 80% with room rates at about A$300 a nite.

On Business Times.

• TA Enterprise buys Serendah land
  
  Published: 2009/05/27
  
  TA ENTERPRISE Bhd has agreed to buy a piece of freehold commercial land in Serendah, Selangor, from Europlus Corp Sdn Bhd for RM44.9 million cash. Its unit, TA First Credit Sdn Bhd (TAFC), will buy the 31.5ha land.
  
  The deal will improve TA Enterprise’s landbank and also reduce the debt owed by Maxisegar Realty Sdn Bhd to TAFC. However, it did not say how much Maxisegar owes TAFC. Maxisegar and Europlus Corp are part of Talam Corp Bhd. It expects to complete the purchase by January 31 2010.

On today's Business Times again.

• TA Enterprise to buy land for RM26m
  
  Published: 2009/06/02
  
  TA Enterprise Bhd will buy a piece of freehold land in Pekan Sungai Penchala Selangor for RM26 million.
  
  Its wholly-owned unit entered into a sale and purchase agreement with Elite Meridian Sdn Bhd yesterday for the land measuring 3629 sq metres together with a four storey commercial building with one level basement car park.
  
  “The property is purchased for recurring rental income as well as to house some of TA Enterprise Group’s operations,” it told Bursa Malaysia yesterday.

Massive property ventures.

And then of course, back last month TA Enterprise had announced the following on Business Times.

• TA Enterprise to list property unit by October
  
  By Adeline Paul Raj Published: 2009/05/16
  
  The property business, TA Global Bhd, will have a paid-up capital of RM1.5 billion and RM2.4 billion in assets
  
  TA ENTERPRISE Bhd (TAE)(4898), a property and financial services firm, is targeting to list its property business on the Main Market sometime during end-September or early October, its top official said.
  
  The property business, known as TA Global Bhd, will be one of Malaysia's largest property firms with RM2.4 billion in assets, managing director and chief executive officer Datin Alicia Tiah said.
  
  It will have an issued and paid-up capital of RM1.5 billion.
  
  "If everything goes well, we can issue the prospectus in one month's time. It all depends on how soon we get approval from the Securities Commission," she told reporters at a briefing yesterday.
  
  The move will essentially see TAE holding all of the group's financial services businesses and TA Global holding the property-related assets.
  
  The reason for doing this is to unlock TAE's value for shareholders, Tiah said.
  
  TAE's board also announced yesterday a first and final dividend of 4.5 per cent less tax for the fiscal year ended January 31 2009.
  
  Holders of its TA Warrants 1999/2009 will be entitled to the dividend if they exercise the warrants into TAE shares before the warrants expire on June 24 this year.
  
  As part of the proposed listing scheme, those who exercise the warrants before the expiry date will become TAE shareholders and also obtain TA Global shares and irredeemable convertible preference shares (ICPS).
  
  TAE is proposing that shareholders get three TA Global shares and three ICPS for every five TAE shares held. This, however, is just an indicative ratio, Tiah said.
  
  If all the warrants are converted, TAE will end up holding 38 per cent of TA Global, allowing it to equity account the business.
  
  Among the properties that TA Global holds are development projects such as Damansara Idaman, Idaman Villa, Seri Suria and Nova Square.
  
  Its property holdings include Menara TA One in Kuala Lumpur, Terasen Centre (Vancouver), Radisson Hotel (Sydney), Aava Whistler hotel (Whistler, Canada) and Westin Hotel (Melbourne).
  
  Once the listing is done, the TAE group - one of the largest landbank owners in the vicinity of the Kuala Lumpur City Centre - may decide to set up retail, office and hospitality property trusts. This may be done with a third party, Tiah said.
  
  On another front, Tiah said that plans for TAE to obtain an investment banking licence had been put on hold.
  
  The group is cash-rich, with more than RM200 million currently.

And here is the Star Business version.

• Saturday May 16, 2009
  TA Global to list in October
  By FINTAN NG
  
  KUALA LUMPUR: TA Global Bhd, the property arm of stockbroker-cum-developer TA Enterprise Bhd, is targeted to list by early October after having postponed the listing twice.
  
  TA Enterprise managing director and chief executive officer Datin Alicia Tiah said at a media briefing yesterday that this would be done via an “initial public offering by introduction”.
  
  Many of the new shares in TA Global will be given to shareholders of TA Enterprise as a dividend-in-specie or via placement.
  
  She said due to the current market conditions, the company had decided to seek other ways of bringing its property arm public, hence the further revision to the listing scheme.
  
  Tiah said TA Enterprise 1999/2009 warrant holders who exercised their warrants by June 24 were not only entitled to TA Enterprise shares but would also be entitled to TA Global shares when the proposed further revision was approved by the Securities Commission in a month’s time.
  
  In addition, they would be entitled to the irredeemable convertible preference shares (ICPS) to be issued by TA Global that could be exchanged for ordinary shares in three years from the date of listing at no cost.
  
  Tiah said the listing exercise would see TA Enterprise still a major shareholder of TA Global even assuming that the ICPS shares were fully converted.
  
  She said TA Global, which would incorporate all the property units now under TA Enterprise, would have assets worth RM2.40bil located in Malaysia, Australia and Canada.
  
  “We’re one of the larger landowners in the vicinity of KLCC at the moment,” Tiah added.
  
  The company has a 2.3-acre freehold parcel located next to its corporate headquarters, Menara TA One on Jalan P. Ramlee, besides having developed Idaman Residence condominium on a neighbouring plot.
  
  Besides landbank in the country’s capital, TA Global would also own a number of hotel and office properties abroad.

Needless to say, I am not a fan of listing of subsidiaries for one reason. Them holding companies have the option of delisting via a privatisation offer, which usually does not benefit the REAL investor. But hey, that's just me. I am just not a fan.

Anyway... I wonder what the shareholders of TA Enterprise are thinking now. They see the company splashing tons of money into the property sector. And when comes to the listing of 'TA Global', I wonder if the shareholders of TA Enterprise would be getting a special listing offer.