Morgan Stanley may hand over ANA hotels
Morgan Stanley may have to give up its $2.4 billion portfolio asset of Japan's ANA Hotel chain to creditors, if as expected, the firm fails to repay debts due in April this year.
The main lenders to the Japanese hotel group, including Citigroup Inc. and local lender Shinsei Bank, are reportedly putting pressure on the US firm to increase their equity in the property, to give the devalued holdings more security. The Morgan Stanley Real Estate Funds unit in June 2007 purchased 13 hotels and two property-management units from All Nippon Airways Co. for JPY281.3 billion ($2.4 billion), the biggest acquisition by value in the Asian Pacific region during the recent realty boom. Citigroup and Shinsei provided the US investment firm with around 65% of the purchase price in senior debt, while the Government of Singapore Investment Corp provided mezzanine financing. GIC has expressed interest in taking over the full-service hotels from Morgan Stanley and is discussing terms with the other lenders. No decision has been made so far.
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