VietNamNet Bridge - Kim Lien Hotel, covering an area of 3.5 hectares in the central district of Hanoi, is now the ‘aiming point’ of big real estate developers in Vietnam after the State announced the sale of 3.64 million stakes of the hotel on December 22.

Giants join secret league for Kim Lien Hotel

Kim Lien Hotel has nine buildings, 437 hotel rooms and five restaurants, most of which were built many years ago. With the outdated facilities and old style of architecture, the hotel has been mostly serving domestic travelers but cannot attract foreign travelers.

The State Capital Investment Corporation (SCIC), when taking the management over the hotel, thought of joining forces with other investors to restructure the hotel’s operation. Sources said that a ‘Vietnam’s biggest real estate group’ planned to pour capital into Kim Lien, but the plan later failed because the managers could not get the nod from shareholders.

However, the current poor material facilities, the weak brand and the low land use efficiency ratio won’t make Kim Lien less attractive in investors’ eyes. What investors interested is the usage rights for the 3.5 hectares of land in the central business district. 

Regarding the way SCIC sells Kim Lien’s shares, an analyst commented that since all the investors chasing the ‘golden land’ are the ‘big guys’ which have big influences in the business circle and the big power enough to supervise the sale, selling shares through auctions is the best method to sell shares.

According to the Hanoi Stock Exchange, SCIC will put 3,647,433 shares in auction at the starting price of VND30,600 per share. Investors will have to buy in bulk with the total of VND111.6 billion at minimum.

Kim Lien makes a pretax profit of VND15-16 billion a year in recent years.

A source from SCIC said a lot of investors have asked for information about the share auction. However, it is still unclear about the names of investors, because they asked for information in the name of individual investors.

Besides SCIC, Kim Lien has three more big shareholders – GP Bank which holds 21.6 percent of shares, GP Invest which holds 6.6 percent and PT Finance 6.7 percent.

GP Bank is a special shareholder because it has been taken over by the State Bank at the price of zero dong. It is highly possible that the shareholder, planning to focus on its core business, will sell its Kim Lien stakes. Some existing shareholders have sent words that they would also sell their shares if they can go for good prices.

This means that the investors, who can buy 52 percent of Kim Lien’s stakes from SCIC, will have the opportunities to collect more shares to hold the controlling stakes in Kim Lien. 

Pham Huyen