Several potential buyers participated in the preliminary bidding for Alpensia Resort, the main venue of the 2018 Winter Olympics, despite some uncertainties over the deal.

Sale manager Deloitte Anjin received letters of intent from potential buyers earlier this month, industry sources said on Friday (November 13). A number submitted non-binding offers and started conducting due diligence from November 11.

“More than two potential buyers participated in the race, so we could sell the resort through a competitive bidding,” said an official of Gangwondo Development Corporation (GDC), which operates Alpensia Resort. He said the final bids will be taken from December 11 to 17 following a month-long due diligence.

Market insiders are surprised there is more than one potential buyer, as it was thought bidders might be deterred by uncertainties over the resort business, Alpensia Resort’s weak financial structure and a high acquisition price: GDC wants to sell the resort for 800 billion won ($723 million). An industry source said that there won’t be many strategic or financial investors prepared to purchase the business for such a price.

It is believed that potential buyers are not very keen on a deal, but may be studying the business in case GDC fails to sell the resort as a whole and tries to offload it separately.

Alpensia Resort has three zones consisting of a golf village estate, condominium, hotel, ski resort and water park, as well as the Alpensia 700 golf club and sport facilities.

Some potential buyers seem to be only interested in particular zones. One strategic investor reportedly started to hire a deal manager and join the race, but later canceled the plan as it only wants to take over the golf village estate.

“It needs to be seen whether the potential buyers will finish the race,” an industry source said, adding that much of the focus is on whether GDC will switch to a separate sale if it fails to dispose of the business as a whole.

GDC’s debt ratio has been at the 200% level over the last five years. At the end of 2019 it had total borrowings of 822.5 billion won and net borrowings of 674.9 billion won, and has financing costs of about 20 billion won every year. GDC has been trying to offload the resort business since 2014. (Reporting by Byung-yoon Kim)

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