Sunday, 10 April 2011

US billionaire to sell stake in Moscow hotels

Billionaire Ronald Lauder is being asked to sell his stake in 12 Moscow hotels that include Moskva Hotel next to Red Square, Vedomosti reported, citing sources in City Hall. This request is being ascribed to a possible change in plans over the future of the land on which Rossia Hotel used to sit.

The Moscow government holds an 80 per cent share in the Hotel Company, a holding that controls the 12 hotels in question and was originally going to develop the Rossia Hotel land. Lauder’s Russian Real Estate Fund purchased a 20 per cent stake for 5 billion rubles in late 2009.

The “divorce” between Lauder and Hotel Company is expected to be amicable, with a source close to the Hotel Company telling Vedomosti that Russian Real Estate will sell its share to the Moscow government.

Lauder will sell his stake due to the Hotel Company’s plans to build a parliamentary center on the land slated for the company’s most prized asset, Rossia Hotel, which was originally supposed to be rebuilt, Vedomosti reported. The Hotel Company was created in late 2009, with the Moscow government due to transfer shares to 18 hotels, including Moskva and Rossia.Rossia, National and Budapest were dropped from the list, Vedomosti reported.

A source at the Hotel Company said he could not comment on shareholders’ decisions.

But the Rossia Hotel was the most attractive asset in the holding, he told The Moscow News, and uncertainty over its future may lead to shareholders reconsidering their plans.

“We don’t have information on what will be decided about the land slated for Rossia,” he said. “The concept has changed, so yes, a lot of things are under consideration.”

Because the Moscow government will have to pay Lauder back the 5 billion rubles he invested, it may have to sell 49 per cent of shares in Dekmos, a company that controls the Moskva Hotel, to billionaire Suleiman Kerimov, a source close to the company told Vedomosti. Kerimov has not commented on the potential deal.

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