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Mon 5 Jul 2010 03:26 AM

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Kingdom Holding may sell minority stakes in hotels

Company will evaluate its portfolio of hotel assets to 'reconfigure overall stratergy'.

Kingdom Holding may sell minority stakes in hotels
STAKE SALE: Kingdom Holding may sell minority stakes it holds in luxury hotels like The Savoy, London, as part of a plan to focus on higher earning properties. (Getty Images)

Kingdom Holding Co, the investment company controlled by Saudi billionaire Prince Alwaleed Bin Talal, and its hotels unit may sell minority stakes held in hotels as part of a plan to focus on higher earning properties.

Kingdom has a “handful” of assets where it owns a 50 percent stake or less, and it “will assess the viability” of those holdings and may sell them to reinvest in the same industry, Sarmad Zok, chief executive officer of the lodging unit Kingdom Hotel Investments, said by phone from New York on June 30. He declined to identify the properties.

Kingdom Holding owns a 50 percent stake in The Savoy Hotel in London, 35.5 percent of The Plaza Hotel in New York and 50 percent of the Fairmont in San Francisco, according to information provided by Kingdom Hotel Investments.

It also owns stakes in five hotel managers including Fairmont Raffles Hotels, Four Seasons Hotels and Movenpick Hotels & Resorts, according to information on the company’s website.

Kingdom Hotel will evaluate its portfolio of hotel assets as well as the hospitality and real estate investments of its parent to “reconfigure the overall strategy to capture greater benefits,” Zok said. The plan to possibly sell minority stakes will not apply to the five hotel managers, he said.

“The monetization of minority stakes” was done successfully at Kingdom Hotel Investments over the last five years “and we will be looking at assessing rationalization opportunities” for Kingdom Holding’s assets in the mature markets, Zok said.

Zok was appointed to the board of Kingdom Holding Co. and its investment committee to drive the “strategic development” of Kingdom’s hotel portfolio, the Riyadh based company said in an emailed statement June 30.

Kingdom Holding delisted Kingdom Hotels from Nasdaq Dubai last month after making an offer in March to buy out all the shares in the company it did not own.

Kingdom Hotel properties include 23 operating hotels and resorts, and four under construction or in the initial stages of development, including in Seychelles, Marrakesh and Accra, according to the website.

The company plans to spend $800 million on hotels in the second half this year and first half of 2011, Zok said in May.

Zok said: “You buy growth in Asia, and you are opportunistic in capturing bargains in the mature markets."

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