Foreign firms set to buy Bali hotels

Foreign firms set to buy Bali hotels

JAKARTA (JP): Eight foreign institutional investors and hotel
operators are currently involved in active negotiations to
acquire hotels in Bali, a hotel property consultant said.

The associate corporate advisory of PT Procon Konsulindo/Jones
Lang LaSalle Hotels, Djodi Trisusanto, said the targeted hotels
were four and five-star rated.

He told The Jakarta Post on Monday his company handled five of
the eight ongoing negotiations.

"They have made the price offers and are now involved in a
more advanced negotiation stage," he said, declining to name the
hotels, owners or buyers.

The negotiated hotels were located mostly in the Badung
district in the eastern part of Bali, which includes tourist
areas such as Kuta, Jimbaran, Nusa Dua and Benoa, he said.

"The proposed acquisitions which we mediated are purely
business and not part of a debt restructuring program
whatsoever," he added.

The Indonesian Hotel & Restaurant Association (PHRI) estimated
about 50 hotel operators and owners were currently weighed down
with bad debts and were included on a recent list of 1,689
indebted companies issued by the Indonesian Banking Restructuring
Agency (IBRA).

IBRA has taken over bad debts worth nearly Rp 200 trillion
from banks which were closed down or received bailout funds from
the government.

IBRA has warned the 1,689 indebted companies to come up with a
concrete debt settlement program or face legal action.

PHRI said bad debts in the tourism sector take up around 15
percent of the total non-performing loans.

Djodi said hotel transactions in areas other than Bali were
unlikely.

He said the foreign investors were very pleased to see that
the campaign process from May 19 to June 4 and the general
election on June 7 went smoothly. He noted that more investors
have started to look for opportunities to acquire hotel and
resort properties here.

"But they are still in favor of Bali more than other areas
because they believe it is more secure and stable," he said.
(cst)