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)