Singapore sovereign fund bids US$1.5b for 5 bankrupt resorts

NEW YORK CITY A Singapore sovereign wealth fund has bid US$1.5 billion for five bankrupt luxury resorts controlled by billionaire John Paulson.

Government of Singapore Investment Corp., which has a stake in Hyatt Hotels Corp., made the offer public during a bankruptcy court hearing this week.

The five properties in question are Grand Wailea Resort and Spa, Maui; Arizona Biltmore Resort and Spa, Phoenix; La Quinta Resort and Club and PGA West in La Quinta, California; Doral Golf Resort and Spa, Miami; and Claremont Resort and Spa in Berkeley, California.

The portfolio’s ownership group, CNL-AB LLC—a joint venture of Paulson & Co., Winthrop Realty Trust and Capital Trust Inc.—has declined to comment on the offer. However, Bloomberg reports that Paulson may believe the assets are more than the bid price and that overtures for the resorts may have been made privately by other groups.

CNL-AB acquired the five resorts and three others last month through a foreclosure proceeding and immediately took the five properties into Chapter 11 bankruptcy protection.

The joint venture says the bankruptcy filings are an attempt “to further restructure the company’s debt at the property level and to improve operations during a time of recovering fundamentals in the hospitality industry.” The filings effectively eliminated about US$800 million of debt and preferred equity.

The Singapore fund and Paulson have each offered bankruptcy loans for the company, which will seek approval for the financing by the end of the month, according to Bloomberg.