Prague Hilton Hotel sale hits legal hurdle
The announced sale of Prague’s Hilton Hotel last year appeared to stir a lot of interest from would be investors. But their appetite looks like it will have to be put on hold amid a legal battle between the former Irish owner and the consultancy charged with offloading some of the choice property assets.
The sale of the hotel was announced last November by the consultancy Avid Asset Management, which was tasked with managing the property portfolio of former Irish millionaire, Sean Quinn.
Quinn’s multifaceted business empire, covering real estate, glass manufacture, insurance, and cement, was taken over by the Irish government in 2011 after debts rocketed in connection with the financial and economic crisis that hit the country. The Prague Hilton was one of the few property assets which still had not been sold by the consultancy.
The main legal dispute though centres mainly on Quinn’s responsibility for debts totaling 2.3 billion euros which were run up by the Quinn empire to Allied Irish Bank (AIB) before the bank had to be rescued by the Irish state.
Sean Quinn’s family firm has now bounced back and is challenging Avid Asset’s Management offloading of the property assets, including the 791-room Prague Hilton Hotel, the Czech business daily Hospodářské Noviny reported on Monday, saying that it has two sources closely connected with the affair.
The sale’s delay until the legal dispute can be ironed out in Dublin will come as a disappointment to those interested in snapping up one of Prague’s sought after real estate assets for a reported price tag of at least 150 million euros.
The paper said that the front-runner purchasers had been whittled down to two: the Best Hotel Properties (BHP) of Czech-Slovak investment group J&T; and the well known US investment group, Blackstone.
BHP says that ownership of the Hilton, one of the main conference hotels in Prague and those whole of Central and Eastern Europe, would fit in well with the activities of its already owned InterContinental hotel. A 90 percent stake in that hotel was purchased in 2013 for 115 million euro.
The upper end of the Prague hotel market appears to have resisted the worst of the economic and financial crisis with ever stronger occupancy rates reported for top of the range rooms. A study at the start of the year pinpointed the top end of the Prague hotel market as likely to be the focus for a wave of foreign investment thanks to its strong performance and prospects. Incoming investment interest was likely from the Middle East and Far East, the study suggested.