In January, the board of Al Batinah Development agreed to invest RO656,000 in the capital of Destination Hotel Management Co, a subsidiary of Omran - which owns the Wadi Irfan Crowne Plaza Hotel project. The hotel is currently under construction and is expected to start operation in 2017.
“We would like to inform shareholders that the developer of the project has imposed additional fees of RO7mn on the project as a whole for the rights other than what were agreed previously,” Al Batinah Development said in a filing with the Muscat Securities Market on Sunday.
“And thus, the value of the company's contribution to the project is now RO1mn, representing five per cent of the project capital, instead of RO656,000 which was defined previously,” it added.
After studying the impact of the additional cost, Al Batinah Development said its board of directors has decided not to participate in the project due to non-feasibility of the investment.
“There is no obligation on the company or impact on the financial statements of the company as a result of this decision,” it added.
The Al Batinah Development board, which met on Thursday, also approved the unaudited consolidated financial statements for the first half of 2016. The net profit of the group rose to RO275,888 from RO194,928 a year earlier.