Malaysia Airlines has sold its luxury Four Seasons Hotel on the tourist island of Langkawi to a firm controlled by a Saudi royal tycoon for RM435 million.

The sale is part of the airline's restructuring plan, the carrier said late Thursday, days after posting a net loss of RM136.4 million for 2006.

The deal "forms part of MAS' strategic asset rationalisation exercise by the disposal of non-core assets as an initiative in our business turnaround plan," it told Malaysia's bourse in a statement.

Under the deal, a wholly-owned subsidiary of Prince al-Waleed Talal Abdul Aziz al-Saud's Kingdom Hotel Investments (KHI) will buy the hotel from a unit of Malaysia Airlines.

It will also take up a RM364.1 million debt owed by the unit to Malaysia Airlines, which will earn RM62 million from the sale.

Billionaire Prince al-Waleed, a member of the Saudi royal family, co-owns the luxury Four Seasons hotel chain with Microsoft chairman and founder Bill Gates.

Al-Waleed was ranked number five in the Forbes 2005 list of the world's richest people, and has an estimated fortune of US$23.7 billion.

His sprawling interests include hotel properties world-wide and stakes in the Fairmont and Movenpick hotel chains and investments in Citigroup, Time Warner and Apple Computers, according to KHI's website.

Positive divestment

Analysts today welcomed the sale as a positive step for the airline, which embarked on the turnaround plan a year ago after posting massive losses of RM1.14 billion for 2005.

"While the financial impact may not be significant, we view the divestment as positive, as MAS will dispose another non-core asset at a profit, which will allow management more funds and focus to turn around the airline," said the head of research at Alliance Investment Bank, Wong Chee Seng.

"The hotel sale ... will allow the transformation of MAS into an asset-light airline services provider, which is in line with global industry trends," he said in a research note.

Last year, the loss-making national carrier disposed of its headquarters and other buildings as part of the restructuring exercise which has also seen it axing unprofitable routes.

Its 2006 result was smaller than expected, and it has forecast a net profit between RM50.0 million and RM90.0 million ringgit for 2007.