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Although related bodies in the Daeha Business Centre joint venture declined to comment on the deal, a Hanoi People’s Committee source said that Hanel had not faced any difficulties in taking over 70 per cent stake from the foreign partner Daewoo E&C in the Daeha complex, which include the five-star Daewoo hotel, an apartment building and office tower.
The deal was initiated in 2010, when Hanel, which held 30 per cent stake at that time, and Lotte proposed options to buy into the complex. In July 2010, Daewoo told Hanel about its plan to sell stakes to Lotte.
In January 2011, Daewoo and Lotte signed a memorandum of understanding, with Lotte to pay $111 million to own 70 per cent of Daewoo’s stake in the joint venture.
In March 2011, Hanel proposed to pay Daewoo $90 million, plus some other sweeteners.
Daewoo then proposed Hanel pay a further $6 million, raising the transaction value to $96 million to outbid Lotte.
Hanel also said it offered an easier deal as it is a Vietnamese company and a joint venture partner, which meant a shorter time for finishing purchase procedures and would allow Daewoo to further cooperation between two sides.
The Daeha complex consists of 411 hotel rooms, 193 serviced apartments and more than 21,000 square metres of office for lease and is popular with Korea’s business community.
The complex was built in 1996 under the instructions of former Daewoo chairman Kim Woo-Jung to stand symbol of the group’s global management. The joint venture was named Daeha Joint Venture Limited.
According to Korean newspaper MK Business News, after 18 years of operation under the form of joint venture to 2011, the Daewoo hotel was expected to need a further three years to come to the “investment recovered point”, while the project’s certificate was 49 years long.
The Daeha joint venture is not the sold cooperation between Daewoo and Hanel. In 1994, Daewoo Hanel Electronic Joint Venture was born to manufacture electronic appliances and Daewoo Hanel Joint Venture to operate Sai Dong A Complex. However, in 2006 the Sai Dong A complex lost its certificate when Daewoo could not prove its financial ability to undertake the project.