April 17, 2009
Raffles Hotel reported to be going on sale
THE wealthy Arab owner of Raffles Hotel is reported to have put the local icon back on the market in a bid to offset billion-dollar losses racked up in the financial meltdown.
Prince Alwaleed Bin Talal Alsaud of Saudi Arabia is said to have put a price tag of $674 million on Raffles, the iconic heritage hotel on Beach Road.
London's Times newspaper said yesterday that Fairmont Raffles Hotels International is seeking buyers for Raffles and other hotel assets, despite a severely depressed market.
If true, this is the second time in as many years that the Singapore landmark has been the subject of a sale.
However, the communications manager for Prince Alwaleed's Kingdom Holding Company, which has a controlling stake in Fairmont Raffles, said early this morning that the Prince was not seeking a buyer for Raffles Hotel.
Last May, a proposed sale of Raffles Hotel to a consortium led by former Credit Suisse banker Mark Pawley failed to materialise for reasons that remain unclear. The deal was said to have been tagged at about $650 million.
The hotel is more than 120 years old and gazetted as a national monument.
Built by the Sarkies Brothers in 1887 on the site of a 10-room bungalow, the hotel expanded quickly and its fame grew far and wide, partly thanks to it being mentioned in the works of writers Somerset Maugham and Joseph Conrad.
In 2005, it was part of a hotel portfolio belonging to Raffles Holdings - since delisted - that was sold to US-based Colony Capital for $1.7 billion.
Colony Capital later merged that portfolio with Fairmont's assets to create Fairmont Raffles. Other local assets owned by Fairmont Raffles include Fairmont Singapore and Swissotel The Stamford.
The group has 123 hotels under the Fairmont, Raffles, Swissï¿½tel and Delta brands.
The Saudi Arabia-based firm is one of the world's leading hotel investors.
But industry sources told The Times the Saudi Prince is considering a range of disposals after a sharp fall in value of some of his biggest investments.
The Evening Standard in Britain yesterday said he is also looking for a buyer for the Savoy, London's most famous hotel, which could be worth more than £200 million (S$445 million). Kingdom Holding has denied this report as well.
Prince Alwaleed's investments have taken bruising hits, most notably in American banking giant Citigroup. His initial 3.9 per cent stake has plunged in value from more than US$50 a share two years ago to about US$4 today.
Last October, the Prince tried to stabilise the situation by increasing his stake to 5 per cent, but the shares have continued to nosedive.
KHC also lost a bundle of cash on its investments in Songbird Estates, the majority owner of London's Canary Wharf financial complex, Euro Disney and Rupert Murdoch's News Corporation.
Kingdom Hotel Investments, a small London-listed vehicle in which the Prince has a 55 per cent stake, has also lost more than two-thirds of its value in the past 12 months.
Fortune magazine said his wealth has fallen from US$21 billion to about US$13 billion (S$19 billion) over the past year.