China Post to auction hotels to shed non-core assets

China Post Group, operator of the country’s postal system, will auction off 60 hotels, an asset exchange said, as the government urges state companies to shed non-core businesses.

The China Beijing Equity Exchange, a site for trade in unlisted assets, said on its Web site that China Post would sell the hotels through an auction at the exchange.

An exchange official said the hotels, located in 24 provinces across China, would be subject to further valuation but would be worth a total of at least four billion yuan (USD 541 million).

China Post put 30 hotels up for sale in June in an auction in Shanghai and aims to sell all 400 of its hotels by the end of 2008.

China’s state asset watchdog, the State-owned Assets Supervision and Administration Commission, has urged major state-run companies to focus on their main businesses and sell unrelated operations to improve efficiency and competitiveness.

Sinopec Corp, Asia’s top refiner, plans to sell its hotel businesses to China Travel Service Ltd.

China Post Group was created in January in a restructuring aimed at improving efficiency in the country’s postal system, which was previously operated by the government itself.

Some hotel operators see the auction as an opportunity to expand.

Home Inns & Hotel Management Inc, China’s biggest budget hotel chain, said in July it was in talks with China Post on the purchase of some properties as it aims to quadruple the number of its hotels to 1,000 in the next few years.