South Korea’s newly established private equity firm Striker Capital Management has begun a process to acquire Hanwha Group’s Saipan World Resort.

Striker Capital has entered into exclusive negotiations on details of the deal to acquire the resort complex in the Northern Mariana Islands, according to sources on August 14. The PE firm is reportedly discussing with limited partners whether to conduct on-site detailed due diligence on the target.

An auction process for Saipan World Resort, which began last year, attracted multiple potential buyers including Chinese strategic investors and domestic financial investors before Striker Capital won exclusive negotiation rights. But the due diligence process has been delayed until recently due to Covid-19.

Among the factors that make the target more interesting for potential investors are tourists’ high preference for Saipan and its regional accessibility. In 2018, South Korean tourists accounted for the largest share, or 75% of those who visited Saipan World Resort, followed by Chinese visitors with 18%. Saipan is known as one of the favorite tourist destinations particularly among Chinese tourists because it is the only U.S. territory where they can travel without a visa.

Hanwha Hotels & Resorts, the leisure and hospitality arm of Hanwha Group, acquired the resort complex in Saipan from World Construction Co, which was under workout program, for 30 billion won ($25 million) in November 2009. Saipan World Resort is the only overseas asset among the 15 resort complexes Hanwha Hotels & Resorts owns. The resort complex’s normalized earnings before interest, taxes, depreciation and amortization (EBITDA) was maintained at approximately 13 billion won between 2015 and 2017.

The buyer is likely to mull over how to utilize land measuring more than 155,000 square meters Saipan World Resort leases on a long-term basis, which can be used for the development of leisure facilities or a condominium to attract more tourists.

Saipan World Resort will likely to be acquired by Striker Capital if the remaining process goes smoothly as expected. Established in 2016, Striker Capital bought Paganica Country Club, an 18-hole golf resort in Chuncheon, Gangwon Province, for 95 billion won last year. (Reporting by Ar-rum Rho)