The Legal Execution Department has announced the reserve auction price of the Dhara Dhevi Hotel in Chiang Mai, with an initial price of 2.11 billion baht. Bidding is due to begin on Nov 12.
The bidding price represents just half of the sum that the Inter Energy Corporation (IFEC) injected to acquire shares in the hotel in December 2015. IFEC, which is listed on the Thai stock exchange, spent 2.52 billion baht -- including liabilities reaching 4.3 billion baht.
The announcement comes after the Court of Appeal dismissed a petition for business rehabilitation that was made on Nov 18 last year. The hotel then had to close down and declare itself bankrupt.
The five-star, 153-rai Dhara Dhevi Hotel was built in 2002 with a budget of over 3 billion baht. It opened in 2004 in tambon Tha Sala of Muang district, boasting 123 hotel rooms.
The hotel was designed to simulate the historical site and heritage of the ancient Lanna kingdom despite the disapproval of some academics.
It was placed under the supervision of the Mandarin Oriental Hotel Group for 15 years for guidance on hotel management, personnel training, marketing and public relations.
Since its launch, the hotel has faced a series of financial issues, prompting it to seek investors. In 2015, the major shareholder sold the hotel outright to the IFEC.
Its travails continued, however, due to the impact of the Covid-19 pandemic, forcing it to announce its temporary closure.
Due to liability issues, the hotel had insufficient funds to pay the salaries of more than 300 of its employees, as well as utility bills, which together amounted to millions of baht per month.
The hotel filed a petition for a proposed rehabilitation plan in June last year, but the Appeal Court dismissed it, resulting in the hotel laying off its employees and declaring bankruptcy.