Kinh Bac Corporation yesterday announced that it had decided to transfer 100 per cent of its stakes in Lotus Hotel Development Company, the developer of the Diamond Rice Flower hotel complex, to Growing Sun Investment Joint Stock Company.
The announcement took insiders by surprise because in June 2016, Kinh Bac made the news by setting up a special company named Lotus Hotel Development Company to develop this long-delayed project.
Along with the establishment of Lotus Hotel Development Company, Kinh Bac’s chairman Dang Thanh Tam only a few weeks ago announced that the chartered capital of this company was increased to VND1.5 trillion ($66.6 million) from VND145 billion ($6.4 million).
This increase, according to Tam, is meant to give the project a push after more than eight years of delay.
With the sale of 100 per cent from Lotus Hotel Development Company, Tam has officially given up on his dream to build a landmark building with sophisticated design in My Dinh area in the west of Hanoi.
Delayed since 2009, Kinh Bac has so far paid more than VND26 billion ($1.15 million) to Foster & Partner for its design and the zoning expenditures for the project.
Before that, the prime location was assigned to a consortium of Japanese Riviera Corporation and CSK Finance in the early 2000s. These investors, however, could not implement their project due to a financial crisis in their home country.
Taking over the project, Kinh Bac paid $5 million to the Hanoi People’s Committee and committed to building a children’s home in a remote area of Hanoi, with the cost of $1.5 million.
Considering the situation of the real estate market in Hanoi, Kinh Bac has decided to reduce the scale of the project from the original 100 to 50 floors.
Growing Sun Investment Joint Stock Company, the buyer of the project, was established in 2006. With this new investor, insiders expect that the design of the Diamond Rice Flower hotel complex will be revised once more.