The troubled airline conglomerate, SAirGroup, has sold its Swissôtel Hotel and Resorts unit to Singapore's Raffles Holdings, in a deal worth SFr520 million ($306 million).This content was published on April 23, 2001 - 09:53
SAirGroup had listed the unit as one of a number of businesses it wanted to sell to help it return to profitability.
SAirGroup spokesman, Erwin Schärer, told swissinfo that the group had been looking to divest itself of activities which were not directly linked to the company's core businesses of airlines and airline-related services.
SAirGroup said in a statement that ownership of the 23 hotels in the chain, which will continue to operate under the Swissôtel name, would be transferred to Raffles at the end of May.
Of the 23 properties in the Swissôtel chain, the group owned four outright, with the remainder mainly employing the management services of the Swissôtel group.
SAirGroup said the price of SFr520 million included the sale of the Seoul Swissôtel to its South Korean owner and the sale of a stake in a Vienna hotel.
Schärer told swissinfo that the Raffles group had filled the three most important criteria that SAirGroup had set for a potential purchaser.
"The potential buyer had to be able to take all the properties and guarantee to keep the Swissôtel brand," explained Schärer. "Also the buyer had to takeover the Swissôtel management company."
SAirGroup came in for criticism for not inviting Swiss hotel group, Mövenpick, to make an offer in the international tender round. However, Scherrer said Mövenpick "did not fulfil the three major requirements" the company had set for potential buyers.
Schärer added that the Raffles sale was the best deal for shareholders, who are disgruntled by the scale of losses at the company overall.
"We've had to deal with various parties and market situations but of course we had to get the best price possible," Schärer explained.
SAirGroup last month reported a SFr2.9 billion loss for 2000, due in large part to its loss-making foreign airline interests.
Swissôtel was one of the few parts of the SAirGroup's empire not to make a loss in 2000, posting earnings before interest and tax of SFr34 million.
by Tom O'Brien
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