InterContinental Hotels - March 13, 2006
InterContinental Hotels Group PLC ("IHG") today announces it has sold a portfolio of 24 hotels (4,903 rooms) to a subsidiary of Westbridge Hospitality Fund LP. Westbridge is a hospitality investment fund managed by Westmont Hospitality, one of IHG's largest franchisees. The portfolio has been sold for €352m (approximately £240m), marginally above net asset value. Proceeds to IHG in cash and debt assumption are €345.2m (before transaction costs), with the balance of €6.8m relating to third party minority interests.
The hotels have been sold to Westbridge with 15 year franchise contracts. Normalised franchise fees are expected to be approximately €4m per annum. The hotels are located in Continental Europe and operate under the Crowne Plaza, Holiday Inn, and Express by Holiday Inn brands. The transaction is expected to complete in the second quarter of 2006.
The disposals represent a continuation of IHG’s strategy to grow its managed and franchised business and reduce asset ownership. Since separation in April 2003, IHG has disposed of, or is in the process of disposing of, 175 hotels with a net asset value of more than £2.8bn.
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