Mirax Group owners may lose their Turkish Sungate Port Royal Hotel
Victims of Crisis
Sergei Polonsky and other principal shareholders of Mirax Group, one of Russia’s lagest real-estate development corporations, who had acquired the fashionable Sungate Port Royal Hotel, one of the largest hospitality assets on the Turkish beach for 340mln.euros, may lose their expensive ‘pet project’ to their creditor following a series of crisis-instigated defaults in repayment of the loans used to bankroll the deal in 2007.
According to sources close to the issue, Sungate will be taken over by the Turkish Vakif Bank that issued the loan for the acquisition of the hotel, which was pledged as collateral. According to the loan terms, the credit was given for seven years to be repaid in equal installments annually over this period. However, by end of 2008, it became clear to Vakif Bank that the borrowers, who had suffered seriously from the negative consequences of the global economic crisis, would not be able to service the loan further as stipulated in the contract. Later one of the Vakif Bank employees confirmed the bank’s intention to take over Sungate and then sell it via court to redeem its money.
The Sungate Hotel, and indeed, like all the other highly liquid foreign assets affiliated with Mirax Group, does not belong to the group itself, but are private projects of the group’s principal beneficiaries. These include Polonsky, the corporation’s board chairman with an 85% stake in Mirax Group, Artur Kirilenko (10%) and board members such as Dmitry Lutsenko, Maxim Privezentsev and Maxim Temnikov with the rest stakes. In the Sungate issue, Mirax Group cannot help its owners with cash infusion, since it is also in a very complicated situation, as its total debt load, as at the beginning of 2009, according to the data provided by the group owners, stood at $779 million.
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