Wrecking ball for Renaissance hotelThe Renaissance Seoul Hotel in Yeoksam-dong, southern Seoul will be sold off and its building demolished.
The owner of the hotel, Sambu Construction, is under court receivership and its principal underwriter Samil PricewaterhouseCoopers has selected IGIS Asset Management as the preferred bidder.
“We will dismantle the hotel and construct an office building, which will become a new landmark in Gangnam,” said IGIS Asset Management.
The construction company under a workout program had agreed to hand over rights to sell the hotel to creditors in exchange for 40 billion won ($36.6 million) in February. By selling off the hotel’s property, the company expects to pay creditors.
The acquisition price proposed by the bidder was 1.1 trillion won, higher than what the market expected. When the bid to sell the Renaissance Seoul Hotel is completed, the current 1,400 percent debt ratio of Sambu will drop to around 40 percent. The total amount of its debt was 1.05 trillion won at the end of last year. After selecting the preferred bidder, Sambu and Samil PricewaterhouseCoopers notified major creditor Woori Bank.
The asset management firm and construction company are planning to sign a memorandum of understanding as early as this week, according to Sambu Construction yesterday. A contract is expected to be completed by October.
Meanwhile, IGIS Asset Management said the building is inefficient considering to its premium plot of land. It is reviewing various types of possible projects, including ones that combine office and hotel space or office and apartments.
It will determine the project based on a survey result of creditors’ demand currently in progress. Construction could start by the end of the year, and the hotel will operate until then.
IGIS Asset Management was founded in 2010 by the former Vice Minister of Construction and Transportation Kim Dae-young.
By Kim Jung-yoon [firstname.lastname@example.org]