Strategic Property Investors Company Limited is selling its 100 per cent stakes in three hotels — two in Vietnam and one in Indonesia — through the Strategic Hospitality Extendable Freehold and Leasehold REIT (SHREIT), according to a regulatory filing on September 25.
The assets, including Ibis Saigon and Capri by Frasers in Vietnam and Pullman Jakarta in Indonesia, will be sold to LT Rubicon Limited for $105 million, following a revised offer. LT Rubicon, a British Virgin Island-domiciled company, had in April offered to acquire the properties for $118 million. Dealstreet Asia reported.
The three hotels comprised a total valuation of $132.6 million on December 31, 2019, Strategic Property Investors said in the filing to the Stock Exchange of Thailand.
The estimated net value per trust unit was 4.4331 baht on the date of the announcement, still representing a 26 per cent premium to the 30-day weighted average price of SHREIT units, it added.
SHREIT said it will utilise the proceeds to repay accrued liabilities and unpaid expenses, including the senior loan and other fees.
“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,” the firm said.
The global health crisis has severely hit the hospitality market in Indonesia and Vietnam, with the former leading ASEAN in COVID-19 fatalities and the latter facing a second wave of coronavirus.
“SHREIT is in breach of multiple contractual obligations, putting it at risk of enforcement or litigation by its counterparties including its senior lender,” the trust manager revealed. It said it has requested for waivers and reliefs on certain breaches.
The firm expects the remainder of 2020 to be extremely challenging, and its dividends will be suspended indefinitely, according to Dealstreet Asia.
By Nguyen Thi Bich Ngoc