SINGAPORE (Jan 25): First Sponsor’s indirect wholly-owned subsidiary FS Milan Property is acquiring a former hotel building in Italy for 9.3 million euros ($14.4 million) from Fondo Kona, a real estate close-ended alternative investment fund controlled by Europe’s BNP Paribas.
Located at 33 Corso Buenos Aires in north-eastern Milan, the six-storey vacant and unleased property was formerly named Grand Hotel Puccini, then known a 65-room four-star hotel.
It is currently the subject of an ongoing dispute between the seller and the building’s ex-tenant – who claims there is a preliminary sale and purchase agreement between itself and Fonda Kona, which the latter has allegedly failed to honour.
This said ex-tenant is seeking a court ruling by end-2019, with the next litigation hearing to be held in March.
Considering appeals made to the Supreme Court, First Sponsor estimates that the litigation process may take approximately eight years.
While the group did not name the building’s ex-tenant, this is understood to be the iH Hotels Group, which owned and ran Grand Hotel Puccini.
In its filing on Thursday, Sponsor says its sees the acquisition as an opportunity for it to expand its property-holding business into Italy.
The group reminds its shareholders that there is no assurance iH Hotels will succeed in its bid to take over the property, nor bring collateral actions against it to affect the group’s possession or use of the acquired asset.
Likewise, there is no assurance that the group will be able to recover all losses arising from the litigation under its insurance policy.
Shares in First Sponsor closed flat at $1.27 on Wednesday.
