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Croatia to reconsider sale of Hotel Zagorje to Zhongya over failed payment

Author Iskra Pavlova
Croatia to reconsider sale of Hotel Zagorje to Zhongya over failed payment Deal, business, corporate contracts

ZAGREB (Croatia), February 4 (SeeNews) - Croatia's government is going to reconsider the sale of Hotel Zagorje to Chinese-owned Zhongya Nekretnine after the buyer failed to pay the agreed price of 14.1 million kuna ($2.1 million/1.9 million euro), state assets minister Mario Banozic said.

Zhongya Nekretnine has failed to make the payment even though the deadline was extended twice, therefore the government will decide on the fate of the deal at one of its following meetings, Banozic said in a statement on Monday.

In August, Zhongya Nekretnine signed a contract with the government for the purchase of the hotel which has a total area of 27,000 square metres.

Later, however, the company requested an extension of the payment deadline, saying the political tensions between China and Hong Kong impede the money transfer from Hong Kong. In response to the company's request, the government in Zagreb extended the payment deadline until the end of 2019.

"The state assets ministry has respected these reasons but since they failed to meet the November 11, 2019 payment deadline and then the second deadline of December 31, 2019, the ministry has kept the 598,000 kuna guarantee and it is up to the government now to decide what will happen next," Banozic said.

Last month, local media reported that despite failing to meet the latest payment deadline, Zagreb-registered Zhongya Nekretnine has not given up on the investment plan and is ready to discuss it again with the government.

Hotel Zagorje is located in Kumrovec, some 60 km north from the capital Zagreb. Zhongya was the sole bidder in the tender for the hotel opened in March.

Zhongya founder Jiang Yu has said the company plans to develop a 200 million kuna congress and health tourism facility at the location of Hotel Zagorje, adding the launch of construction works is planned for 2020.

In December, Croatian media reported that Zhongya Nekretnine has bought some 30,000 square metres of land in Kumrovec, adjacent to Hotel Zagorje.

Jiang Yu is already involved in several other investment projects in Croatia, planning to build a traditional Chinese medicine centre at the site of an existing hotel in the mountain resort of Krapinske Toplice in the north, nearby Kumrovec, as part of a 20 million euro ($22 million) investment programme. The plan includes the construction of a new hotel in Krapinske Toplice, as well as a nursing home for elderly people.

In October, local media reported that Jiang Yu had submitted a letter of intent for investing in the Osijek airport, in north-eastern Croatia, with plans to develop its cargo and passenger terminals, and build a logistics centre in the adjacent area.

(1 euro = 7.45186 kuna)

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