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Paulson Puts Four US Hotels Up for Auction for $1.5 billion

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Published on 21/08/12 - Updated on 17/03/22

Hedge fund Paulson & Co has put up four bankrupt US hotels up for auction. Singapore sovereign wealth fund GIC has made an initial bid of $1.5bn.

The 740-room Arizona Biltmore, located in Phoenix; the 279-room Claremont Hotel Club & Spa in Berkeley, California; the 780-room Grand Wailea, located in Wailea, Hawaii; and the 796-room La Quinta Resort & Club, located in La Quinta, California, have been put up for sale by Paulson & Co. The Government of Singapore Investment Corp (GIC) has bid $1.5 billion for the properties, which Paulson along with Boston-based Winthrop Realty acquired from Morgan Stanley in 2011. The hotels were put into bankruptcy shortly after, the new owners hoping to restructure the assets and repay the creditors while avoiding an auction. The establishments had been operating under bankruptcy-court protection.GIC manages Singapore's foreign reserves and is a large real estate investor in the United States. A lender to the hotel group, it made an offer to acquire it after the hotels filed for bankruptcy, but this was rejected.The $1.5 billion offered by GIC has been chosen as the stalking horse bid and includes up to $1.12 billion in cash and paying off up to $360 million debt. Even if the hotel group selects another bidder GIC stands to recover its debt. The auction is likely to be held on October 25th. The hotels are under management contract with Hilton Worldwide.

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