Morgan Stanley may hand over to creditors its US$2.4 billion investment in a chain of Japanese hotels when the debt becomes due in April, The Wall Street Journal said yesterday, citing people familiar with the matter.
Morgan Stanley acquired the chain of 13 hotels from All Nippon Airways in 2007, in what was then the biggest hotel transaction in Asia. Since then, property prices worldwide have dropped sharply.
However, two of the main lenders in the purchase, Citigroup and Shinsei Bank want Morgan Stanley to put more equity into the property, for more security against declining prices, the paper said. So far, Morgan Stanley has been reluctant to do that, the paper said. Officials for Citigroup and Shinsei declined to comment. No one was available for comment at Morgan Stanley.
Another lender, GIC – an investment arm of Singapore’s government, is interested in taking over the hotels from Morgan Stanley and is currently in discussions with the other lenders, the paper said, citing one person. An official for GIC declined to comment.
Source: Business Times, 18 Feb 2010
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