Hyundai group buys Banyan Tree resort

Hyundai Group yesterday acquired Banyan Tree Club and Spa Seoul, a local unit of the luxury Singapore hotel chain, for 163.5 billion won ($139 million).

The sale was completed after the company was chosen as the preferred bidder for the six-star resort five months ago in January.

“Seoul has been experiencing a surging demand for hotel facilities and [needs to have] around 50,000 more rooms,” said the group in a release yesterday.

“With our administrative know-how, [Hyundai] is set to make Banyan Tree Club and Spa Seoul a luxury resort for families.”

The price was 4 billion less than earlier estimates after Hyundai group completed its due diligence.

A group board of directors meeting last month decided that four subsidiaries - Hyundai Elevator, Hyundai Securities, Hyundai Logistics and Hyundai Merchant Marine - would put up the financing of 90 billion won for Hyundai L&R, a specially established corporation for this acquisition. Hyundai Merchant and Marine owns 100 percent of Hyundai L&R. The rest of the purchase price will be financed from commercial banks.

The group said it will disclose more detailed management plans for the resort in the coming days.

A real estate agency, Urban Oasis, purchased the former Tower Hotel site on Mount Namsan in 2007 and opened the six-star resort in 2010, but it suffered from severe liquidity problems.

By Lee Sun-min [summerlee@joongang.co.kr]