Goldman Sachs takes over Regent Hotel Bangkok

Asian Economic News, April 12, 1999

BANGKOK, April 8 Kyodo Leading U.S. investment bank Goldman Sachs and Co. has effectively taken over the five-star Regent Hotel Bangkok by having one of its property investment funds purchase 14,550,000 shares of Rajadamri Hotel Co., owner of the Regent, from two subsidiaries of Japan's EIE International Corp., Goldman Sachs announced Thursday.

The investment fund, GS Emerging Market Real Estate Fund, brought 32.3% of Rajadamri Hotel from Japanese sellers Ransway Co. and Rantack Co., both EIE subsidiaries, at 38 baht (1.02 dollars) per share. The purchase makes Goldman Sachs the largest single shareholder in Rajadamri Hotel, which owns 100% of the five-star hotel, the company statement said. Goldman Sachs and its local ally, Bangkok Hotel Holdings, announced last week a tender offer for a minimum 26% of Rajadamri Hotel. In accordance with Thai securities law, Goldman Sachs, as the single largest shareholder, is committed to proceed with a mandatory tender for 100% of Rajadamri Hotel. Henry Cornell, managing director of Goldman Sachs (Asia) Co., said earlier the investment in the Regent Hotel reflects Thailand's improving tourism industry. The deal has brought about 14.5 million dollars into the cash-starved Japanese sellers, Ransway and Rantack. Their parent company, EIE, also faces a severe liquidity crunch of its own. EIE, a hotel and resort developer, is a major debtor of the recently bankrupt Long-Term Credit Bank of Japan. It has many properties abroad, including those in Hong Kong, London and Bangkok, but most of the properties are nonperforming assets that intensified the financial problems at LTCB, according to one Japanese banker familiar with the company and the bank. Neither EIE nor its financial adviser Mitsubishi Trust and Banking Corp. were available for comment on the Regent deal or on EIE's financial status.