The opening of the Corinthia Hotel London is going ahead as planned next month, despite the turmoil in Libya and the freezing by the EU of Libyan assets, The Times Business has learned.
The Corinthia Hotel London’s inauguration has been given the full go-ahead by the UK authorities.
The EU sanctions, to be officially announced tomorrow, are expected to freeze the assets of the Libyan Investment Authority, the Libyan Arab Foreign Investment Company (LFICO) and the Libyan Central Bank.
The Corinthia Hotel London is owned by a consortium made up of International Hotel Investments (IHI) – Corinthia’s hotel investment arm – LFICO and Nakheel Hotels of Dubai. The consortium secured a £135m bank loan from a syndication of banks led and arranged by Barclays. The other members of the syndicate include the Libyan Foreign Bank, the Arab Banking Corporation and Bank of Valletta.
Corinthia Hotel London has initiated a high profile adverting campaign and five full page adverts were placed in the FT’s latest How To Spend It magazine.
The freezing of Libyan assets means these cannot be disposed of, and there can be no money flows or economic resources to and from the investments or assets, and therefore there can be no dividends or loan repayments.
However, the day to day running of the Corinthia Group, which is a joint venture with LFICO and which owns a number of hotels in Europe and Malta, is not expected to be affected and it is generally accepted that it will be able to continue operating normally. It is understood that the Corinthia Group is pleased with the way the Maltese government has handled the Libyan crisis, and is satisfied with the guarantees Malta was given to ensure that Malta-based companies with a Libyan shareholding will be able to continue functioning normally despite the EU sanctions.
Other companies with Libyan government shareholding in Malta include Medavia, Vivaldi Hotel, Milano Due Hotel and Medelec.
The Libyan Investment Authority has more than $60 billion in assets, including a combined 7.5 per cent stake in Italian bank UniCredit SpA, a three per cent stake in UK-based educational publisher Pearson PLC and a holding in Italian football club Juventus.
The EU has already frozen the assets of 26 Libyans, including Libyan leader Muammar Gaddafi, his family and his close associates, and banned them from travelling to the bloc. It also prohibited the sale of weapons to Libya.
The EU sanctions go further than the United Nations sanctions agreed last month. In the US, President Barack Obama signed an executive order freezing the assets of the Libyan Central Bank and the Libyan Investment Authority as well as those of Colonel Gaddafi, his family members and senior officials. US Treasury officials said the US has frozen nearly $32 billion in government assets since the uprising began.