Chinese Chengtong is negotiating the purchase of a Moscow hotel in Beijing - sources

China Chengtong Holdings Group Ltd, a Chinese state-owned company, is negotiating the purchase of a Beijing hotel in central Moscow from the state-owned development company VTB, Gates, three sources who know about the negotiations told Reuters.

“China Chengtong holdings group Ltd is among the investors with whom negotiations are underway (on the sale of the hotel). The group expects to reach agreements on the sale of the hotel before the end of the year, ”says a written response from VTB to Reuters request.

The Chinese office of Chengtong did not respond to numerous calls to Reuters. Reuters’s written request, sent on the feedback form on the Chengtong Greenwood Business Park website, remained unanswered.

The press service Gals Development declined to comment.

Hotel Beijing was built in the center of Moscow at the intersection of the Garden Ring and Tverskaya Street, designed by the architect Dmitry Chechulin in the style of the Stalin Empire. It opened in the 1950s and was supposed to commemorate the friendship between China and the USSR. The hotel has 151 rooms, part of the building area is used as offices.

According to three sources, Reuters, over the past year and a half, many buyers were interested in Beijing, but now the only bidder is the Chengtong group, which conducts due diligence of the facility.

The press service of VTB says that the bank “is negotiating with a number of potential buyers, including from Russia and China,” and that “no legally binding documents have been concluded on the transaction.”

Chengtong is under the administration of the State Committee for Control and Management of State Assets under the State Council of the People's Republic of China and owns assets worth 55 billion yuan ($ 8 billion). In Russia, Chengtong bought Greenwood Business Park in the north-west of the Moscow Region several years ago.

The representative of one of the international consulting companies operating in the Russian Federation says that Gals wants to receive about 6 billion rubles for the object. VTB and Gals did not answer the question of what price the developer plans to bail out.

Stanislav Ivashkevich, the founder of consulting Ivashkevich Hospitality, who knows that investors from China are interested in the Beijing hotel, believes that “for them there is a political logic - to buy a Beijing hotel, this can be an argument in favor of the deal”.

Gals Development transferred to VTB Bank for debts in 2009. In January, the head of VTB, Andrey Kostin, said in an interview with Reuters that the bank is actively working on selling real estate owned by Gals, including the Beijing Hotel, and that in 2018 the company plans to sell assets of 22 billion rubles.

Photo: art-apple.ru

Source: ru.Reuters.com