The municipal government of the resort city Parnu declared Nov. 25 that it has nullified its earlier ruling according to which OU Memfis Trade was declared the winner of an auction of the Rannahotell (Beach Hotel).
The Parnu municipal government said that OU Memfis Trade would be returned the fee it had paid to take part in the auction as well as its collateral.
Deputy head of the Parnu municipal government's economics department said the cancellation was caused by two applications that Scandic Hotel Estonia, current leaser of Rannahotell, had filed in court. The Parnu city government is interested in early conclusion of the litigation and a settlement satisfying all the parties, city authorities said.
Memfis Trade, the only interested party in the auction, made a bid for the purchase of the hotel at the initial bidding price of 21 million kroons (1.34 million euros).
After becoming owner of Rannahotell, the owner would have started talks with Scandic over increase in rent.
Scandic protested the sale of Rannahotell. As a result of the application, the administrative court halted action at entering the property into real estate register.