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In the context of the budget deficit and the State decision to divest from 10 large State-owned Enterprises, including the huge names such as Vinamilk, FPT, Binh Minh Plastic and Bao Minh insurance, the Vietnam Association of Financial Investors (VAFI) has proposed to the Government to sell its shares in large hotels.
Tourism is one of the fastest growing sectors in Vietnam so the sale of the hotels located in prime locations has attracted a lot of attention from both domestic and foreign investors. Here are some major hotels in Hanoi that are most interested in by investors, including private investors.
Thang Loi Hotel
Last year it was big news when a local corporation – BRG – became an investor of Thang Loi Hotel, the most beautiful and famous hotel in Hanoi, after it was privatized.
It was said that BRG Group acquired a 30% stake, the State still held 20% and the rest was sold to the hotel’s staff and outside shareholders.
Thang Loi Hotel is located on Yen Phu Road, Tay Ho District. The hotel has a total area of about 4.5 hectares. It opened in mid-1975 and was the present of the people of Cuba to Vietnam.
The hotel has changed management several times. From 1975 to 1986, it was under the Government’s management. In the 1986 to 1995 period it was transferred to the Hanoi Tourism Company. Since 1995, the hotel has been an independent business.
BRG Group is a private corporation with golf, real estate and finance and banking businesses. Its owner, Nguyen Thi Nga, the chair of the Southeast Asia Bank (SEAbank), is a famous entrepreneur who has successfully acquired large businesses and hotels in Hanoi.
The BRG Group is also an investor of the Hilton Opera Hotel after becoming a strategic investor of Thang Long GTC, the operator of the Hilton Opera Hanoi and a chain of leading hotels and golf courses in the country, such as the Hilton Garden Inn, the Doson Seaside Gold Resort, the Legend Hill Gold Resort and the Kings’ Island Gold Course.
Hilton Opera is a 5-star hotel, located in the city center, near the Hanoi Opera House, south of the Hanoi Old Quarter. The hotel was put into operation in 1999 with 269 rooms and suites. According to business license, Thang Long GTC holds 30% of the charter capital of the hotel.
According to documents of the annual shareholders meeting in 2015, Lotus Joint Stock Company, a member of Saigon Tourist Corporation said it would buy a 51% stake of the Daewoo Hotel from Hanel.
The company planned to spend VND3,650 billion (about US$180 million) to implement the deal. By July 31, 2015, Lotus says it has successfully purchased a 34.8% stake of Daewoo Hotel and was continuing negotiations to complete the deal.
Opened in 1996, Daewoo, located on an area of 3ha at No. 360 Kim Ma Street, is one of the most famous 5-star hotels in Hanoi. The hotel has served international politicians like former US President Bill Clinton, Russian President Vladimir Putin, the former president of China Hu Jintao, etc.
The first owner of the hotel was Daewoo E&C Korea and Vietnamese company Hanel, with 70% of the capital held by the Korean partner. After about 16 years of cooperation, in 2012 Hanel suddenly announced successful purchase of 70% of the capital of the Korean partner and became the owner of Daewoo Hotel.
The affair was considered an impressive deal of the year because the product for sale and purchase was Daewoo Hotel, which is located on the prime golden land area of Hanoi.
When hearing that Daewoo wanted to sell its stakes in the project, many investors, especially from the Republic of Korea, expressed their will to become the new owner of the project. Meanwhile, Hanel was not an impressive name, even compared with domestic investors.
However, a provision of the investment license stipulates that in case one of the parties in the joint ventures wants to transfer stakes, the other partners get priority to take over the stakes. It is clear that the value of the complex is very big. Unlike 1992, the area has become the golden land of Hanoi.
Hanel was established in 1984, managed by the People's Committee of Hanoi City. Recently, the city has approved equitization plan for the company, under which the city will sell 61% stake to strategic investors and auction nearly 10% to the public.
Kim Lien Hotel
The State Capital Investment Corporation (SCIC) has announced the auction of the entire 3.6 million shares of the Kim Lien Tourism Company, the owner of Kim Lien Hotel, at the starting price of VND30,600 per share (US$1.5). The number of shares offered by SCIC is equivalent to 52.4%, worth VND112 billion (over US$5 million) at the minimum price.
Kim Lien Hotel, formerly known as Bach Mai hotel, was founded in 1961 and is one of the oldest hotels in Hanoi. It is situated on 3.5 hectares of land in Dao Duy Anh Street, Dong Da District. The hotel has 9 buildings, 437 rooms and 5 restaurants.
The auction, scheduled on December 22, 2015, with a prime location and the large number of shares for sale, is expected to attract many investors.
Besides SCIC, Kim Lien is currently owned by the largest shareholders such as GPBank (21.6%), PTFinace (6.7%), and GP Invest (6.6%).
This hotel was built in 1901 and is the first 5-star hotel in Hanoi. The two biggest shareholders of Metropole are VinaCapital and the Hanoi Tourism Corporation (Hanoi Tourist). The foreign partner holds a 50% stake, equivalent to book value of $58.7 million.
In 2012 VinaCapital said to sell all of its shares in the hotel, but until now the transaction has not finished.
Real estate brokers said that the deal was not made because at that time the economic situation was dim and the State shareholder, ie Hanoi Tourist, still controlled the operations of the hotel.
However, a new move has prompted investors’ attention: Hanoi Tourist must be restructured and in the future it may issue additional shares.
Hanoi Tourist, through subsidiaries, also hold stakes in many other hotels, like Hilton Opera, Pullman Hanoi and Hanoi Hotel.