Mos City Group (MCG), a Moscow-based development company owned by Pavel Fuks, has acquired a 55% stake in the Budapest and Peter I Hotels located in the centre of the Russian capital for a total amount of $60 mln, including $47 mln of debt, according to Russian media reports.
Mos City Group (MCG), a Moscow-based development company owned by Pavel Fuks, has acquired a 55% stake in the Budapest and Peter I Hotels located in the centre of the Russian capital for a total amount of $60 mln, including $47 mln of debt, according to Russian media reports.
MCG bought a 15% stake in the two hotels from creditor bank VTB and 40% from MC Ko Hotels Management Ltd., an offshore company based in Cyprus. MCG is said to be negotiating the acquisition of a further 15% stake owned by Russia's national development bank VEB while a 30% interest will be retained by the Government of Moscow.
MCG is planning to invest $70 mln in the redevelopment of the 112-room Budapest Hotel, which will become a five-star hotel property to be managed by an international hotel operator.
In 2006, the holding company for the two properties, OAO Hotel Budapest, was granted $47 mln of debt from bank VTB for the refurbishment of the Budapest Hotel and for the development of a new hotel with 134 rooms to be named Peter I, but it was forced to name administrators in April 2008 as it had failed to meet debt payments.
