Mirae Asset claims it has money for Anbang hotels
Mirae Asset Global Investments said Wednesday that financing problems are not delaying the completion of the $5.8 billion purchase of hotels from China’s Anbang Insurance Group. The Korean investment company said the deal is being delayed because the insurer did not fulfill certain requirements for the deal’s closure.
Last September, Mirae Asset Global Investment signed an agreement with Anbang Insurance Group, to purchase 15 five-star luxury hotels located in the U.S. for $5.8 billion. Mirae Asset was supposed to complete payment by April 17 and close the deal.
“Speculation in media that Mirae Asset Global Investments is having problems securing capital to finish the deal is not true,” Mirae Asset said Wednesday.
“The deal is being delayed because we are still waiting for Anbang Insurance’s response regarding our request to fulfill requirement needed for the deal’s closure.”
According to the Korean investment company, it has found an ongoing legal battle between Anbang Insurance and a third party in the U.S. that could have an impact on the acquisition while it was conducting due diligence on the hotels. Mirae Asset requested the Chinese company to report on the matter. It says there’s been no answer.
“The company notified the seller on April 17 that if the matter of violation in the purchase agreement is not resolved within the next 15 days, we can cancel the deal. We are going to wait for their response until May 2," the Korean investment company said.
Anbang Insurance Group, which is based in Beijing, filed a lawsuit against the Korean investment company Monday, seeking an order that compel Mirae Asset to perform obligations in completing the purchase deal. The lawsuit is filed with Delaware Chancery Court.
Bloomberg reported that the deal is being delayed because Mirae Asset is having difficulties financing the acquisition amid troubles in tourism and services due to the coronavirus. Citing an anonymous industry source, it said “Mirae is suffering from buyer’s remorse because of hotel closures caused by the pandemic, and it has been unable to secure favorable terms for financing.”
Last year, Mirae Asset made a down payment of approximately 10 percent of the purchase amount, or 700 billion won. It planned to finance the remaining from its group affiliates and local investment banks. The hotels included in the deal are Westin St. Francis in San Francisco, JW Marriott Essex House in New York and the Four Seasons in Jackson Hole, Wyoming.
BY JIN EUN-SOO [firstname.lastname@example.org]
More in Finance
Kim Kwang-soo named as sole candidate to head banking federation
Kospi hits record 2,602.59 as optimism continues after U.S. election result
Dollar deposits jump as punters bet on currency's rebound
Reservation app operator Yanolja to go public next year
KDB says Hanjin KAL funding on the up and up