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Mon 26 Jul 2010 12:44 PM

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Ritz Carlton DIFC buyer to be announced this week

Source says new owner will be named, AED1.5bn asking price almost achieved.

Ritz Carlton DIFC buyer to be announced this week
DIFC BASE: Dubai-based developer Union Properties had an asking price of AED1.5bn for the DIFC hotel. (Getty Images)

The new owner of Union Properties’ Ritz Carlton hotel in the Dubai International Financial Centre (DIFC) will be announced this week, a source at Ritz Carlton told Arabian Business on Monday.

Dubai-based developer Union Properties had an asking price of AED1.5bn ($408.38m) for the DIFC hotel and its chairman Khalid bin Kalban told The National newspaper on Sunday that the price had “almost” been achieved.

Bin Kalban added that the details of the deal were still being “exchanged” with a buyer from the UAE and that an announcement would be made this week. This was confirmed by a source in the Ritz Carlton hotel, who told Arabian Business the new buyer was likely to be announced before the end of the month.

Earlier this year, Simon Cooper, president of the Ritz-Carlton, told Arabian Business at the Arabian Travel Market in Dubai the sale of the site did not affect its management contract and that it was still “business as usual” for the hotel group.

“They don’t have to tell us but put it this way, we know two or three of the bidders very well and I would say that their interest is probably because we have other relationships with them. It is totally Union’s call, we are not involved in the slightest. If they get the price they wanted they would have sold it by now,” Cooper said at the time. Although work on the site has “gone a bit slow because of the challenges Union has had,” the Ritz-Carlton DIFC is due to open by the end of the year, Cooper added.

The sale of the DIFC Ritz Carlton hotel is part Union’s bid to sell off its assets and raise cash to fund its liabilities. The Dubai developer made a loss of $135.5m last year has about $74.1m of liabilities due this year and Bin Kalban said in June that he expects to collect about half of that amount from property buyers in 2010 and 2011 after renegotiating repayment terms with defaulters. Bin Kalban added that the company will be able to settle around $163.3m of liabilities against halted projects. Contractors are owed no more than $54.45m, he added.

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