Hispania has executed, on schedule, the Second Phase of the deal signed in April 2015 with Grupo Barceló, by which it was agreed to contribute five hotels to Bay Hotels & Leisure, SA (BAY).
After executing the relevant options, BAY has acquired the four star category hotels “Barceló Fuerteventura”, “Barceló Castillo”, “Barceló Margarita”, “Barceló Lanzarote”, situated in the Canary Islands and the “Barceló Pueblo Park”, situated in Mallorca. With the completion of this transaction BAY is now owner of 16 resort hotels with a total of 6,097 keys spread throughout the main tourist areas of the Canary Islands, Balearic Islands and Andalusia, as well as two shopping centres. Bay has subscribed the respective lease agreements for each hotel with Grupo Barceló.
In context of this transaction, Hispania and Grupo Barceló have agreed their final stakes in BAY at 76 per cent and 24 per cent respectively, thus cancelling Grupo Barceló’s option to increase its stake in BAY to 49 per cent.
The valuation at which Hispania has acquired its 76 per cent stake in BAY amounts to 458.6 million euros which includes refurbishment capex worth EUR25.2 million, which represents a higher refurbishment capex than originally contemplated, with the purpose of reinforcing the portfolio’s repositioning.
The acquisition has been financed through a capital increase in BAY subscribed by its current shareholders and the draw-down of the second tranche of the financing provided by a syndicate of Banks. Hispania’s equity investment to complete the full transaction and establish its final stake in BAY at 76 per cent has amounted to 186 million euros. As of today, after the full draw-down of the financing of 234 million euros (64 million drawn at First Phase and 170 million euros at the Call Option’s execution) and the completion of the acquisition, BAY has a total adjusted net cash position of 12 million euros.
After this transaction, Hispania has more than 9,000 keys, being the REIT with the largest exposure to the Spanish hotel market with special emphasis on resort hotels, one of the best performing sectors in the Spanish economy.
Source: Property Funds World