InterContinental Hotels Group PLC - July 13, 2006
InterContinental Hotels Group PLC ('IHG') today announces it has agreed to sell a portfolio of seven InterContinental branded hotels (2,537 rooms) located in Continental Europe to the Morgan Stanley Real Estate Funds ('MSREF'). The transaction is expected to complete in the third quarter of 2006.
IHG has retained 30 year management contracts on the hotels, with two 10 year renewals at IHG’s discretion giving a total potential contract length of 50 years. The portfolio has been sold for €634m (£440m) ($804m) in cash before transaction costs, approximately €80m ($101m) above net book value of approximately €550m, with no material tax charge arising. In addition, MSREF has agreed to make capital investments in the portfolio for approximately €60m, including implementing new brand initiatives and adding further facilities to these prestigious hotels.
In 2005, these seven hotels generated revenues of €185m, EBITDA of €42m and EBIT of €23m before management fees. Normalised management fees from the management contracts are expected to be approximately €10m per annum going forward.
On completion of this transaction, IHG will have sold 175 hotels with a net asset value of more than £2.8bn since separation from Six Continents in April 2003.
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Thursday, July 13, 2006
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