Amangiri – Utah, USA

Two weeks ago, there was some news that China-based conglomerate, HNA, had sent in a bid to buy Aman Resorts, a collection of unique luxury resorts in some of the most sought-after destinations in the world. Aman Resorts, which is owned by DLF, an Indian development company, represents the company’s biggest non-core asset.

To bring you up to date, DLF currently has a net debt of more than $4 billion and is looking to raise as much as $650 million to shore up its debt levels and put some cash on its balance sheet. In 2007, the company had bought a 97% stake in Aman Resorts based on a $400 million valuation, while the remaining three percent was held by Aman founder Adrian Zecha. Considering that the purchase was made right before the global financial crisis, DLF has been desperately looking for a buyer for this property.

HNA Hotels and Resorts is part of China-based HNA Group. With assets exceeding $30 billion, the group has its tentacles in airlines, hotels, airport management, real estate, retail, financial services, logistics, and tourism. Annual revenues are around $10 billion (as of Dec. 2011). The hospitality segment of the group consists of a total of 43 luxury hotels and resorts in China and Europe (40 in China and three hotel assets in Brussels and Belgium).

Reports are out that HNA is out of the bidding process for Aman Resorts, since it never received any feedback on its undisclosed bid. Reuters reports that “bids came in the $300-$315 million range”, which means that the market feels these luxury assets are overpriced. This is a huge setback for DLF considering the list of companies interested in Aman Resorts. They include:

• Malaysian sovereign wealth fund, Khazanah
• LVMH, and
• Kingdom Holdings, which owns a 47.5% stake in the Four Seasons chain of luxury hotels

It’s looking bleak for DLF, but maybe some other group will step up to take over Aman.