South Korea’s Mirae Asset International Investments said Monday that it has terminated a $5.8 billion deal to purchase 15 U.S. hotels from China’s Anbang Insurance Group, accusing the insurer of breaching contract obligations.
The shift comes at a time when the coronavirus pandemic has put a series of deals at risk, as valuations have been impacted in a hit to funding prospects.
The tourism sector has been one of the worst impacted by the pandemic, as governments globally restrict travel, resulting in sharp drops in bookings.
A coalition led by Mirae agreed in 2019 to purchase the hotels in U.S. cities, along with New York, San Francisco, and Los Angeles, from Anbang, which had been selling a few of its overseas assets after the Chinese authorities took control of the troubled insurer in 2018.
But the asset supervisor mentioned in a statement that Anbang didn’t resolve breaches of certain obligations regarding the September contract, resulting in the termination of the contract.
Mirae Asset has also invoked its rights for the return of its deposit relating to the failed transaction.
Anbang didn’t instantly respond to Reuters’ request for comment.
A person near Dajia, a new firm shaped to take over assets from Anbang, said the contract termination itself is a breach of the deal and that Anbang didn’t breach any contract obligations.