Search

×

Anbang seized; work continues at Waldorf in NYC

In its ongoing campaign to lower financial risks, the Chinese government on Friday seized control of Anbang Insurance Group Co., owners of the Waldorf Astoria in New York City and Marriott International’s former competitor in the Starwood Hotels & Resort deal, according to a statement from the China Insurance Regulatory Commission (CIRC).

Despite the news, “The work we are doing at the Waldorf (in New York City) is continuing,” a representative from construction firm AECOM Tishman told HOTELS on Friday.

A Hilton spokesperson told HOTELS the company remains in contact with Anbang and “work to restore the Waldorf Astoria New York is well underway and proceeding to plan. We are confident that the hotel will return as a focal point for New York City and a premier global destination.”

Anbang Chariman and key shareholder Wu Xiaohui has been prosecuted for economic crimes, according to CIRC. Wu was arrested in June when the government started cracking down on outbound asset acquisitions by overly aggressive companies like Anbang, HNA and Dalian Wanda Group. Anbang claims assets worth US$310.85 billion.

Anbang had violated laws and regulations which “may seriously endanger the solvency of the company,” the China Insurance Regulatory Commission (CIRC) said in a statement announcing the seizure.

During the government takeover, which will last for one year, the company will be managed by officials from the CIRC, the central bank and other key financial regulators and government bodies. The group will try to restructure Anbang’s equity positions, yet will operate as usual to protect the rights and interests of its consumers and stakeholders, the CIRC said.

The CIRC also said that Anbang’s debts and obligations will not be impacted by the takeover.

How this will impact the ongoing renovation of the Waldorf Astoria is unclear. The bottom line for Hilton is that it has a 100-year management contract on the hotel, which is non-terminable and likely has certain transfer restriction.

An Anbang spokesperson offered a statement to HOTELS: “Anbang Insurance Group Co. Ltd. fully supports the decision announced today by the China Insurance Regulatory Commission. Our businesses and operations are stable. We are confident this will continue under the Interim Management Working Group and in the long term. We remain fully committed to our overseas subsidiaries, businesses and investments. As mentioned in the CIRC announcement, Anbang Group will remain a private company.”

Comment