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Turkish billionaire seeks buyers for luxury hotels in southern Europe

Trophy properties may be sold individually rather than as a portfolio

New York/Istanbul

TURKISH billionaire Ferit Sahenk's Dogus Holding is seeking buyers for luxury hotels across southern Europe including the Capri Palace.

The group - which also owns restaurant chains including Zuma and Nusr-Et, best known for its founder chef's meme, "Salt Bae" - is also talking to prospective buyers for Villa Dubrovnik, Madrid's Hotel Villa Magna and Rome's Aldrovandi Villa Borghese Hotel, according to people with knowledge of the matter.

It's likely that these so-called trophy properties, some of them formerly owned by wealthy families, will be sold individually rather than as a portfolio.

Potential buyers for the hotels include high net worth individuals from Portugal, Spain, Italy, Asia and the Middle East. The firm is also seeking buyers for Grand Hyatt in Istanbul amid its debt restructuring.

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The Dogus hotels each cater to the rich and famous. Capri Palace, for instance, includes just 68 rooms and two Michelin-starred restaurants.

Its presidential suite, which comes with a private pool, can be booked for 8,163 euros (S$13,031) per night later this month, according to its website.

Madrid's Hotel Villa Magna is often used for photocalls. In recent months, actors including Rami Malek, Olivia Munn, Chris Pratt, Denzel Washington and Ryan Reynolds have promoted films there.

On Tuesday, Standard & Poor's downgraded Istanbul-based Dogus's rating to B-, citing the firm's inability to execute planned refinancing - 725 million euros for itself and 1.6 billion euros for its investee companies - contrary to the agency's expectations.

If Dogus is unable to extend the maturity of its borrowings, S&P said it doesn't expect the firm to meet its financial commitments over the coming year "without accelerating and executing asset sales".

"We understand Dogus has a detailed plan to dispose of part of its real estate assets for a total of about 500 million euros in 2019," S&P analysts wrote. They added that most of those assets are outside Turkey.

Mr Sahenk, once Turkey's richest man, spent heavily on hotels, marinas and restaurants in Turkey and abroad after selling his 31 per cent stake in Turkiye Garanti Bankasi for almost US$5.5 billion. Dogus has had to turn to asset sales to reduce its debt load and meet borrowing costs.

Earlier this year, it agreed to sell 17 per cent of d.ream International BV, which owns restaurant brands including Azumi and Nusr-Et, for US$200 million to Singaporean investment firm Temasek Holdings and London-based Metric Capital Partners.

Dogus also sold its stake in a joint venture to build a shopping mall in Izmir in western Turkey to its partner Orjin Group. In May this year, the European Bank for Reconstruction and Development said it would buy a 25 per cent stake in Dogus's D-Marinas BV, which has 10 marinas in Turkey, Greece and Croatia, for 70 million euros. BLOOMBERG

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