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. Last Updated: 07/27/2016

Aroma Wins 2nd Tender for Astoria

ST. PETERSBURG -- Local firm Aroma Investments has again beaten off a British hotelier to win a 35 percent stake in the Astoria Hotel, more than a year after it won a similar, but more controversial auction that was later canceled.

This time Aroma Investments, a company controlled by vodka-producer Alexander Sabadash, put in a bid of 245.8 million rubles ($9.3 million), well ahead of the 176.5 million rubles put up by Sir Rocco Forte & Family Russia Ltd. at a tender held last week by the St. Petersburg Property Fund.

A third firm, Astoria Management Consulting, bid 100 million rubles for the stake. The property's starting price was 94.536 million rubles.

The winning bid was well above the approximately $6 million put up last time by Aroma.

A similar tender last year for the Astoria, a centrally located hotel that is one of the city's oldest and finest, saw Aroma - then totally unknown - beat out Sir Rocco Forte with a bid just 0.25 percent higher than the British firm's bid. Forte, which already held a 25.5 percent stake in the hotel, had been widely expected to win the tender.

The Astoria Hotel, located on St. Isaac's Square, is one of three five-star hotels in the city and the only private one among them. It stands out among city hotels for the ongoing battle waged for its control over the years.

The City Property Fund first sold 25.5 percent of the hotel in late 1997 to Sir Rocco Forte, which also holds the Astoria's management contract. Prior to that sale, it had divided up 39.5 percent among the hotel's staff through privatization.

Last year, within a month of its controversial tender victory, Aroma paid its winning bid of 34 million rubles ($5.5 million at the pre-crisis exchange rate) into the city budget. However, it suspended fulfillment of its $3.9 million investment program into the hotel due to legal difficulties.

At the time, the City Prosecutor's Office, concerned about the purchase of a historical landmark by an unknown company, successfully questioned the legitimacy of the deal in arbitration court, had it found illegal and had Aroma's stake transferred back to the city.

Before more than 20 percent of a property can be sold, the Antitrust Ministry must first sign off on the deal. Aroma had not received such authorization in 1998.

But despite the share transfer and consequent loss to the firm, Aroma has never asked for the return of its money. The company's lawyer, Yevgeny Melnichenko, declined to say whether it was scheduled to recoup its money.

After last week's auction replay, Aroma does not have to face the possibility of having its winning tender declared illegal: It received Antitrust Ministry permission in advance of the sale.

"Finally the legendary hotel has a full set of owners," Melnichenko said in a telephone interview Wednesday.

According to him, the new shareholder is going to improve the hotel's service and "bring back the Astoria's good name." The new owners are going to meet with management after fulfilling the conditions of the deal.

Michael Goerdt, general manager of the Astoria Hotel, said Wednesday that cooperation with the new owners is expected.

Experts have said that the sum of money Aroma is paying for the stake is a large one, and that the only problem with it is its unclear origin.

Alexander Krasnenkov, general director of the Astoria Hotel Complex, said the purchase is extremely beneficial for the city budget, which will receive more than the stake's market value.

"If [Aroma] is ready to pay such an amount, it anticipates [the hotel] must be worth it," he said.