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Accor
has has signed a memorandum of understanding to sell 30 hotel properties (5,000 Ibis and
Novotel rooms) in the United Kingdom to Land Securities for 711 million.
Accor will continue to operate the hotels under 12-year variable leases, whose rents are
based on an average 21% of annual revenues with no guaranteed minimum. The leases are
renewable six times, for a total of 84 years (the variable rent for 2006 would have amounted
to 41 million).
Expenses related to the real estate and hotel building structural
maintenance capex and insurance costs will henceforth be borne by the new owner.
Finally, the agreement includes
a 53 million renovation program financed by the owner.
The transaction enables Accor to partner with a leading UK property company. Land
Securities is a FTSE 100 company with a market value of more than 15 billion, which owns
property assets in England, Scotland and Northern Ireland. In addition, the agreement signed
Monday calls for the creation of a long-term development partnership that will
enable Accor to step up its expansion program in the United Kingdom.
Financially, the transaction will enable Accor to reduce its adjusted net debt by 584 million,
of which 172 million will be added to the groups cash reserves. It will have no impact on
EBITDA but will add 7 million to 2007 profit before tax.
Accor's financial advisers on the transaction were NM Rothschild & Sons, with legal and tax
advice by CMS Cameron Mc Kenna.
See
other recent news regarding:
Accor,
Ibis,
Novotel
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