Funding for development of art'otel london hoxton

RNS Number : 1326J
PPHE Hotel Group Limited
08 April 2020
 

 

8 April 2020

 

PPHE HOTEL GROUP LIMITED


("PPHE" or "the Group")

 

Funding for development of art'otel london hoxton
 

PPHE Hotel Group, the international hospitality real estate group which develops, owns and operates hotels and resorts, is pleased to announce it has entered into a syndicated facility agreement arranged by Bank Hapoalim B.M. for a facility of up to £180 million (the "Facility") to fund the development of art'otel london hoxton (the "Hotel") on a site located by Old Street, Rivington Street, Great Eastern Street and Bath Place, London EC1 (the "Site").

 

The initial maturity date of the Facility is April 2024 although there are provisions, subject to certain conditions, to extend the Facility by two periods of three years each.

 

The Facility bears a floating interest rate, reflecting an interest rate of 4.191 per cent. as at the date of this announcement, reducing following two consecutive quarters after practical completion of the Hotel.

 

The Facility contains customary debt service cover and loan to value financial covenants, applicable following practical completion of the Hotel, which must be complied with, subject to an ability to cure in certain circumstances through the injection of equity or prepayment (to the extent necessary) of the Facility.

 

The Facility will be secured by, among other things; mortgages over the ownership interests in the Site and security over the shares in certain group companies that own such interests in the Site. The lenders under the Facility benefit from completion and cost overrun guarantees provided by PPHE. Drawdown under the Facility is subject to certain conditions precedent being fulfilled.

 

The total aggregate project costs remaining for completion of the Hotel are approximately £200 million. The Group has contributed a material part of its equity commitment for this project as required under the Facility and therefore does not expect a material outflow of cash in respect of this project until July 2022. The Facility entitles the Group to temporarily unlock some of its invested equity of up to £43 million, at the Group's election, in which case the unlocked equity will then be reinvested in line with the progress of the project.

 

Following the approval by the independent shareholders of the Related Party Transaction in relation to the main works for the design and build of the new art'otel london hoxton as announced on 17 March 2020, and in conjunction with the signing of the Facility, the Group confirms that it has entered into a building contract with Gear Construction UK Limited ("Gear") for the design and construction of the Hotel on a "turn-key" basis.  This agreement is conditional on the receipt by Gear of written notice from the Company, which is expected to be given subject to fulfilment of the conditions precedent for drawdown under the Facility and the period for completion of the Hotel under the building contract has been extended to 44 months from the date of such notice.

 

Boris Ivesha, President & Chief Executive Officer, PPHE said:

 

"We are pleased to have secured funding to develop art'otel london hoxton with Bank Hapoalim B.M. which has been a long standing partner of the Group funding several of our other key properties, including Park Plaza Westminster Bridge London which opened in 2010.

 

The development, which is in one of London's most exciting neighbourhoods, will include a new 27 storey building to accommodate 343 hotel rooms and suites, five floors of office space, a gym, swimming pool and wellness facilities and an art gallery space.

 

We believe the project has the potential to deliver attractive risk-adjusted returns for shareholders whilst further expanding our art'otel brand."

 

 

Enquiries:

 

PPHE Hotel Group Limited

 

 

 

Robert Henke

Executive Vice President of Commercial Affairs

Tel: +31 (0)20 717 8600

 

Hudson Sandler

 

 

Wendy Baker / Lucy Wollam

Tel: +44 (0)20 7796 4133

Email: pphe@hudsonsandler.com

 

 

Notes to Editors

 

PPHE Hotel Group is an international hospitality real estate company, with a 1.7 billion portfolio, valued as at summer of 2019 by Savills and Zagreb nekretnine Ltd (ZANE), of primarily prime freehold and long leasehold assets in Europe.  

 

Through its subsidiaries, jointly controlled entities and associates it owns, co-owns, develops, leases, operates and franchises hospitality real estate. Its primary focus is full-service upscale, upper upscale and lifestyle hotels in major gateway cities and regional centres, as well as hotel, resort and campsite properties in select resort destinations.

 

PPHE Hotel Group benefits from having an exclusive and perpetual licence from the Radisson Hotel Group, one of the world's largest hotel groups, to develop and operate Park Plaza® branded hotels and resorts in Europe, the Middle East and Africa. In addition, PPHE Hotel Group wholly owns, and operates under, the art'otel® brand and its Croatian subsidiary owns, and operates under, the Arena Hotels & Apartments® and Arena Campsites® brands.

 

PPHE Hotel Group is a Guernsey registered company with shares listed on the London Stock Exchange and a constituent of the FTSE 250. PPHE Hotel Group also holds a controlling ownership interest in Arena Hospitality Group, whose shares are listed on the Prime market of the Zagreb Stock Exchange.

 

 

Company websites

 

www.pphe.com
www.arenahospitalitygroup.com  

 

For reservations

www.parkplaza.com
www.artotels.com
www.arenahotels.com  
www.arenacampsites.com  


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