Thai company looks to sell two Ho Chi Minh City hotels for $40 million
Thai company looks to sell two Ho Chi Minh City hotels for $40 million
Thailand-based Strategic Hospitality Extendable Freehold and Leasehold Real Estate Investment Trust (SHREIT) are looking to sell two hotels, namely the 3-star IBIS Saigon South Hotel and the 4-star Capri by Frasers hotel in District 7, Ho Chi Minh City.
SHREIT is selling hotel properties in Vietnam and around the world
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IBIS Saigon South Hotel has 140 rooms with the fair value of $14.7 million while Capri by Frasers hotel has 175 hotel rooms valued at $23.7 million. SHREIT is also selling 5-star Pullman Jakarta Central Park hotel in the Indonesian capital Jakarta for $94.3 million.
Most recently, SHREIT has approved the disposition of 100 per cent share of its member companies Strategic Hospitality Holding Ltd. (SHH) and Strategic Hospitality Holding Ltd. 2 (SHH2), following the revised offer from LT Rubicon Ltd. in the UK to acquire all issued and subscribed share capital with the offering price of $105 million.
According to the minutes of the first extraordinary general shareholders' meeting in 2020, Deepong Sahachartsiri, CFO of SHREIT said that the COVDI-19 pandemic had seriously affected the revenue, financial situation, and the business performance of SHREIT.
The hotels which SHREIT has invested in are trading at significant operating losses and continue to accrue expenses and liabilities at an unsustainable rate. The hotels are operating with limited working capital reserves and may not be able to fund operations in the near term.
In addition, the hospitality market in Indonesia and Vietnam has materially deteriorated. Indonesia has consistently recorded over 2-3,000 COVID-19 cases per day, leads ASEAN in COVID-19 fatalities, and has banned all international flights into the country until 2021. As of September 14, 2020, Jakarta entered a second social distancing lockdown, which would further devastate local businesses, including hospitality. Vietnam recently encountered another outbreak, with international flights also prohibited and locking out foreign visitors.
The sale of hotels may help SHREIT to solve its financial difficulties during the COVID-19 pandemic. The company will use the proceeds to pay off all outstanding debts and expenses.
