JW Marriott Hotel, the largest five-star hotel in Bucharest, was appraised at some 150m euros by an independent evaluator.
The evaluation of the hotel was ordered by the Societatea Companiilor Hoteliere Grand (GHES), which manages the Marriott Hotel, upon the request of the syndicate of Austrian banks to which the hotel still owes 80 million euros, sources close to the business say. A syndicate of Austrian banks headed by Erste Bank, Banca Comerciala Romana''s new owner, lent more than 100 million euros secured by the Romanian state in the mid nineties for the completion of the construction works for the hotel. The appraisal took into account the building, which comprises 402 rooms, as well as the adjoining land.
The evaluation commenced early in November last year and lasted about a month, with the shareholders to get the result this week. The GHES representatives could not be contacted to verify the information. The GHES shareholders include the Austria-based Bauholding Strabag (55%, of which 51% is held directly and 4% is held indirectly), ONT Carpati (30%) and Alliance Overseas Import Export. Rumours on the market point to Fathi Taher as the businessman that actually controls the Marriott Hotel, through Alliance Overseas Import Export and a stake reportedly acquired from Strabag. Strabag have not verified the information, while ONT Carpati denied such a transaction ever took place.
Taher could not be reached for comment, as he was out of the country, according to his secretary.
At the moment, the company that manages Marriott has 80 million euros left to pay to banks, says Stelios Thoma, vice-chairman of ONT Carpati, one of the GHES shareholders. He estimates the company could pay its debts in no more than 15 years. Strabag officials could not be reached by the time of going to press for comment on the appraisal of the hotel.
"Marriott is a good business, but in the long run," says Stelios Thoma. "Until the debts are paid, no shareholder will get any profits, but we knew that when we first got into this business," he went on. Thoma added Marriott had made some 42 million-euro turnover in 2005. Marriott is a complicated business. Information on the market points to its value standing at 150 to 200m euros. Initially, the plot of land and the unfinished building close to the Parliament Palace belonged to ONT Carpati, a state-run company. To complete the construction, ONT Carpati turned to the Austrian company Strabag, which, in exchange, became a partner in this business. ONT later sold 15% to Alliance Overseas. ONT was privatised in 1998, with Cyprus-based New Marathon becoming its final owners in exchange for some $3.5m.
Another five-star hotel in Bucharest, Hilton, was appraised at some 34 million euros in a deal whereby the French Vivendi Group sold a stake of 52.54% in the company that manages the hotel, for 18m euros.
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