Mirae Asset Global Investments said Tuesday that Chinese insurer Anbang Insurance had not fulfilled all the requirements needed to close a $5.8 billion deal, and it was waiting for the latter to give an official explanation.

Countering the Chinese insurer’s claim that the Korean firm had reneged on its obligations to closing the deal on April 17, Mirae Asset said it discovered an ongoing legal dispute between the seller and a third party while conducting due diligence on the deal. Mirae Asset has sent a letter urging the Chinese firm to respond within 15 days. It has not heard from them yet, officials said.

“After being selected as a preferred bidder, we found Anbang Insurance is involved in a lawsuit in regard to the hotel portfolio’s ownership with a third-party firm. We’ve kept requesting explanatory materials on it from the Anbang unit, but it hasn’t responded yet,” the company said.

Mirae Asset further notified the Chinese insurer that unless it replies to the letter by May 2, the company has the right to terminate the deal.

The comment came a day after a Bloomberg report that the Chinese insurer was seeking an order compelling Mirae Asset to fulfill its obligations under the purchase agreement. The case was filed with a Delaware court in the US on Monday.

The asset management unit of Mirae Asset Financial Group signed a contract with Anbang Insurance to acquire 15 five-star hotels and resorts in key US cities. Anbang had acquired the hotel and resort businesses from Blackstone in 2016.

To finance the acquisition, the Korean investment firm planned to raise $1.8 billion of funds via its affiliates Mirae Asset Daewoo and Mirae Asset Global Investments, and the remaining $4 billion in partnership with US investment bank Goldman Sachs. Mirae Asset paid a 10 percent deposit in September last year.

Prior to the lawsuit, concerns rose over the multibillion-dollar deal, with some saying that it would be difficult for Goldman Sachs and Mirae Asset to find investors and lenders with the global tourist industry reeling from the novel coronavirus, which still has no cure or vaccine.

While pointing out unprecedented market changes incurred by the novel coronavirus pandemic, however, Mirae Asset said it had no problem with capital financing.

“Due to the rapid market change amid the COVID-19 outbreak, we’ve continuously discussed with the company (Anbang Insurance) about (delaying) the deal closing date and (rearranging) other detailed conditions,” a Mirae Asset official told The Korea Herald.

“There are prerequisites that the Anbang unit has to fulfill before closing the deal. ... Although, it’s nothing to do with capital financing,” he said.

The hotels Mirae Asset is set to acquire includes JW Marriott Essex House New York, The Ritz-Carlton Half Moon Bay, Montage Laguna Beach, Four Seasons Silicon Valley, Hotel Fairmont Scottsdale Princess, Four Seasons Arizona, Four Seasons Resort and Residences Jackson Hole, InterContinental Chicago, InterContinental Miami and The Westin St. Francis San Francisco.

The lawsuit between Anbang and the third party has led a US title insurance firm to reduce the coverage on the case, and that violates the contract with Mirae Asset of providing complete ownership of the US hotels, said an investment bank official, who wished to remain anonymous.

By Jie Ye-eun (yeeun@heraldcorp.com)