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MADRID Spanish chain NH Hoteles, struggling under 1 billion ($1.3 billion) in debt, has been thrown a lifeline with two separate agreements signed with Chinese tourism conglomerate HNA Group and with Hospitality Properties Trust of the United States for which it will receive $376 million.
Under the deal, the two companies will create a joint venture for the Spanish group s entry into the Chinese market under the NH brand and establish a commercial partnership that would enhance cross-selling opportunities, the statement said.
HNA is pleased to join the existing shareholders and directors in supporting NH management as they continue to build a strong, world-class, multinational and multicultural hotel company, Adam Tan, HNA president and vice chairman said in the NH statement.
That agreement would have had the tourism and airline group acquire a 20% stake for $594 million, including a capital increase at a price of 7 a share (then $9.87 per share), or around twice it is now paying.
In the deal with HPT, the Spanish group is to sell five hotels totaling 804 rooms in Mexico, Chile, Colombia and Uruguay to the real estate investment trust for $70 million with a 20-year management contract with renewal options.
The two groups also will create a joint venture to acquire the entire ownership of the NH Jolly Madison in New York and renovate and co-manage with Sonesta the 3-star, 242-room property, the NH statement said.
Under the non-binding terms of the agreement, which is subject to due diligence and final documentation, NH also will receive a 170-million ($222-million) loan from HPT secured by four hotels in Madrid, Barcelona, Amsterdam and Brussels.
The deal with HPT will allow for a serious refurbishing of the Jolly property san diego beach hotel pet which has been an undervalued and underperforming asset, Yuste said. The property needs an overhaul to raise its average daily rates and the return on investment will be there.
san diego beach hotel pet These two deals with the Chinese and the Americans are great news for the company as they reinforce NH s capital and they have an international dimension which is exactly where NH should be heading, Yuste said.
NH also announced its 2012 financial results, reporting registered losses of 292 million ($383 million) compared with a profit of 6.2 million ($7.8 million) the previous year. It blamed the losses on poor performance in Spain and Italy, its two largest markets.
When the talks were first revealed, Spanish press reports san diego beach hotel pet said KKR could take a stake in the chain by purchasing a 15.7% share held by BFA-Bankia valued at around 107 million ($137 million), through a capital san diego beach hotel pet increase.
Asked about the negotiations with KKR, NH communications manager Lucas Martinez told HotelNewsNow.com that while the talks so far have failed to arrive at an agreement, that does not mean that we couldn t speak again in the future.
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