SIUT Trust offers Rs14.5b price for Regent Plaza
KARACHI: Pakistan Hotel Developers Ltd (PHDL) – the owner of Regent Plaza Hotel – reported on Wednesday that it had received an offer price of Rs14.5 billion for the high-end hotel from a renowned non-profit healthcare organisation called SIUT Trust.
According to documents available with the Pakistan Stock Exchange (PSX), the healthcare organisation said in a letter to hotel owners that the Sindh Institute of Urology and Transplantation (SIUT) Trust had decided to acquire the property of PHDL – Regent Plaza Hotel – located at Shahra-e-Faisal in Karachi.
“The SIUT Trust now offers to purchase the said property for any lien or charge for a sum of Rs14.50 billion…on ‘as is where is’ basis,” it said in the letter.
Market talk suggests that SIUT, which offers highly expensive medical treatment free of charge for kidney transplantation and heart and lever diseases – wants to convert the hotel building having 400 rooms into a healthcare structure.
The PHDL’s Annual Report 2023 said that the room occupancy rate ticked down to 19% compared to 20% in the previous year. It had dropped to 9% post-Covid in 2021.
The occupancy rate had remained low in the range of 21-23% even before the pandemic in the years 2018 and 2019, indicating that the hotel management found it difficult to run it with good profit margins.
Recent communication of hotel owners sent to the PSX suggests that PHDL had been in search for a potential buyer.
To take up the matter and decide to accept or reject the offer, the PHDL board of directors has called an urgent meeting, which is scheduled to be held on Thursday, according to a notification.
Renowned surgeon Dr Syed Adibul Hasan Rizvi found the SIUT four decades ago with an eight-bed ward in the Burns Unit of Karachi Civil Hospital. Since then, it has kept on expanding, providing medical services to a large number of patients and reaching half a million patients this year.
It runs the hospital through a charity and provides medical and financial support to patients.
PHDL’s share price spiked almost six times in the past 40 days and stood at Rs485.41 on Wednesday compared to less than Rs80 at the end of August 2023.
The company disclosed that it received the purchase offer from the trust on September 25, 2023 after the healthcare organisation expressed interest in the property.
The share price, however, had been soaring in the days before the material disclosure was made, which prompted the PSX management to initiate an enquiry to know as to why the price was going abnormally high.
In its reply on September 21, four days before the offer was disclosed, PHDL said they were not aware of any such matter or development that may have resulted in the increase in the market share price and volumes.
“We may, however, mention that the company was approached from time to time with respect to the sale of hotel property, however, none of such inquiries have materialised into any offer.”
The company reported a net profit of Rs44.13 million in fiscal year 2023, which was slightly lower compared to Rs47.82 million in the prior year.