(September 2009) posted on Tue Sep 22, 2009 EDT French giant divests 158 hotels in France
Accor continued to push its asset-right strategy with today's announcement of the sale of 158 of its Formule 1 and Duo hotels to a consortium of French institutional investors for $402 million. Under the terms of the sale and variable leaseback transaction, Accor will continue to operate the budget hotels, which represent 12,300 rooms. The initial 12-year lease will be renewable six times at Accor's option.
The group will use the cash influx to reduce adjusted net debt by nearly $277 million in 2009. Roughly $192 million will be added to cash reserves. The overall impact should contribute $7 million on profit before tax. “In a difficult environment, the transaction confirms the renewed interest of investors for hotel real estate, especially for the low-cost segment,” said company sources in a corporate statement.
