NH Hotel Group held its general shareholders’ meeting this Wednesday in which they updated the company’s liquidity forecasts. Ramón Aragonés, CEO of NH, has assured that as of July 2021 the company will stop burning cash and register positive ebitda, although it will not be until 2023 when the hotel chain’s ebitda recovers pre-COVID levels.
In 2024 NH will recover its income from before the pandemic, which came at one of the company’s times of greatest expansion, which closed 2019 one of the best three-year terms in its history. This acceleration of recovery is mainly due to the reinvention of NH’s business strategy, which in the words of its founder, has been a before and after for the company.
This reformulation of its strategy has been a savings of 65 million in operating expenses, which has allowed the company to decouple the recovery of ebitda from the improvement in income. Likewise, to protect the liquidity of the hotel chain, the company reinforced its capital with 100 million corresponding to the loan of Minor International which will be capitalized through a capital increase of more than 100 million aimed at all shareholders and which has been approved at the shareholders’ meeting this Wednesday. Likewise, the Spanish chain has extended the ICO loan of 250 million euros from 2023 to 2026.
On the other hand, the hotel company continues to advance in realization of your asset rotation process under sale & lease back formulas already under study, with which he hopes to obtain an after-tax contribution of more than 200 million euros.
In this sense, last week it announced to the National Securities Market Commission that it is in advanced negotiations for the sale of the NH Collection Barcelona Gran Hotel Calderón for an approximate amount of 125 million euros, maintaining the operation of the hotel under a long-term rental scheme through the payment of a variable income with a guaranteed minimum, and with the usual mechanisms for limiting losses.
Issuance of senior bonds
NH Hotel Group announced this Tuesday that an issue of senior guaranteed bonds worth € 400 million and maturity in July 2026. The funds obtained will be used to repay the now existing senior bond, amounting to 357 million euros and maturing in 2023.
In addition to the issuance of the new bond, in which a significant oversubscription has been obtained and which has an annual coupon of 4%, the hotel company has agreed to extend its line of syndicated credit revolving (RCF) worth 250 million euros, whose maturity will go from March 2023 to March 2026.
