Exsim Hospitality to raise up to RM250.8 mil via rights issue, partly for hotel purchase in Empire City

• Exsim Hospitality plans to allocate RM86.27 million for the 294-room new hotel purchase, a move to enhance its hospitality and property management portfolio.

KUALA LUMPUR (Feb 28): Exsim Hospitality Bhd (KL:EXSIMHB) is raising up to RM250.79 million via a rights issue with warrants, to partly fund the RM240.25 million acquisition of a new five-star hotel in Empire City, Petaling Jaya, Selangor.

The RM250.79 million proceeds from the right issue represents about 71% of the group’s market capitalisation of RM353 million based on Friday’s closing price of 38 sen.

Based on the illustrative exercise price of 20.33 sen per warrant, the full exercise of the warrants would raise approximately RM62.96 million.

Exsim Hospitality plans to allocate RM86.27 million for the 294-room new hotel purchase, a move to enhance its hospitality and property management portfolio. The group told the stock exchange that its unit Uppervista Sdn Bhd had entered into a conditional sale and purchase agreement with Arcadia Hospitality Sdn Bhd for the hotel acquisition.  

Apart from that, RM113.6 million will be channelled towards the refurbishment of its Corus Paradise Resort in Port Dickson, Negeri Sembilan. Meanwhile, RM48.92 million will be used to finance the group’s working capital requirements.

Boutique developer Exsim Group’s founders — the Lim brothers — had in last year acquired a 65.9% stake in Exsim Hospitality — formerly known as Pan Malaysia Holdings Bhd — from prominent tycoon Tan Sri Khoo Kay Peng last year for RM36.73 million. The group is principally involved in the hospitality business, and has diversified into the interior design and fit-out business.

Exsim Hospitality has procured irrevocable and unconditional undertaking letters from its major shareholders — including Exsim Hospitality Holdings Sdn Bhd — to subscribe in full their respective entitlement under the rights issue with warrants exercise, as well as to apply for additional rights shares not subscribed by the other entitled shareholders by way of excess application.

The rights issue with warrants exercise is expected to be completed by the second half of 2025, while the new hotel deal is set to be concluded by the fourth quarter of 2026.

The proposed rights issue with warrants and the proposed acquisition are inter-conditional upon each other in terms of approvals.

AmInvestment Bank and Maybank Investment Bank have been appointed as the joint principal advisors for the proposals, while Quantephi Sdn Bhd will act as an independent adviser.

Exsim Hospitality — which has been loss-making for eight years in a row — saw a turnaround in the latest financial results, posting a net profit of RM1.95 million for the six months of the financial year ended Dec 31, 2024 (6MFY2025), against a net loss of RM1.58 million in the same period a year ago, as revenue jumped seven times to RM21.71 million from RM3.02 million.

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