Government of Singapore Offers to Buy Grand Wailea and Four Other Elite Resorts

Government of Singapore offers to buy Grand Wailea
Proposal is for 5 elite resorts

February 15, 2011 – By HARRY EAGAR, Staff Writer

Article from: The Maui News

According to Bloomberg News, the government of Singapore is offering to buy the Grand Wailea and four other resorts that the Paulson & Co. group put into bankruptcy Feb. 1.

The reported offer of $1.5 billion is close to what the five elite resorts have been valued at in a complicated change of ownership that resulted from Morgan Stanley’s takeover of CNL Resorts.

Bloomberg said the offer was revealed in the U.S. Bankruptcy Court in Manhattan on Monday.

The bidder is the Government of Singapore Investment Corp., a sovereign-wealth fund.

Sovereign-wealth funds are investment businesses run by governments that, like Singapore, enjoy large trade surpluses and need to find ways to use their foreign currency balances. The fund has $100 billion and, according to Bloomberg, is one of the creditors of the resorts.

An investment group led by the Paulson hedge fund managed to take over the Grand Wailea by foreclosing on the previous owner. But the five resorts were pledged as collateral for a billion-dollar loan, and while the new owners tried to work out a restructuring and extension of the debts, they did not do so by a Feb. 1 deadline.
Hence, the bankruptcy filing.

At Monday’s hearing, Judge Sean Lane approved an order allowing the resorts to use the cash collateral of lenders until Feb. 28. “Without access to the cash, the resorts won’t be able to operate and the ‘entire restructuring may be jeopardized,’ lawyers said in court papers,” according to Bloomberg.