Regent Plaza's transfer to SIUT to be completed by May 2024

Resolving any ambiguity, Pakistan Hotels Developers Limited (PHDL) has announced that the transfer of the Regent Plaza Hotel building to the Sindh Institute of Urology and Transplantation (SIUT) is anticipated to be finalized by May 2024, contingent upon fulfilling all stipulations outlined in the sale agreement.

PHDL disclosed in its quarterly report to the Pakistan Stock Exchange (PSX) on Thursday that it had received Rs1.45 billion as a partial payment towards the sale. This disclosure indicates that the deal might finally be going through.

Following this announcement, PHDL's share price rose by 7.50% on Thursday, moving from Rs 435 per share to Rs 468.69 per share.

However, the book value is approximately Rs 790 per share, given that the company's equity stands at Rs 14.3 billion and it has 18 million shares in circulation. Should the deal proceed according to the sale agreement, it could trigger an increase in the share price, aligning it closer to the share's actual book value.

It is better to recall that the PHDL had entered into an agreement with SIUT on November 14, 2023, for the sale of Regent Plaza Hotel land and building for a lump sum sale consideration of Rs14.5 billion.

The transaction was initially scheduled to conclude after a three-month period, ending on February 11, 2024. Nonetheless, on February 12, the parties mutually consented to a 90-day extension of the sale completion deadline from the original deadline to May 11, 2024.

Additionally, PHDL saw a 28% increase in revenue to Rs 85 million and a 190% increase in net profits to Rs 87 million during the six months (July-Dec) CY2023 as compared to the same period of last year. 

This increase was mainly due to the interest income earned by the company on the deposit of advance against the sale of property. 

Furthermore, during this review period, PHDL contributed Rs 70 million towards sales tax and other governmental levies.