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The Dubai-based Global Hotel Investment has taken a 23% shareholding in International Hotels Investments plc, with a memorandum of understanding signed through which Istithmar will invest EUR110 million in the locally listed company.
The funding will be used for hotel property acquisitions and Istithmar will also have two board directors at IHI. The move will mean IHI will acquire from its majority shareholder Corinthia Palace Hotel the total ownership of the Corinthia Bab Africa Hotel and the Commercial Centre in Tripoli, and the Corinthia Towers in Prague. The valuation of both properties shall be carried out by third parties and once regulatory procedures are in place IHI shall issue new shares to Corinthia Palace Hotel Co Ltd.
Moreover, it is the intention of the IHI directors to seek a secondary listing for the shares within the next twelve months.
Istithmar is not the only investor to join IHI. The board announced that 28 million shares of one euro each have been taken up by Kuwait-based National Real Estate Company and the National Projects Holding Company and other institutional investors.
In May this year, the shareholders of IHI approved that board directors may issue more shares for investors. After these transactions are completed, IHI shall have a shareholding based made up of 63% by Corinthia Palace Hotel Co. Ltd, Istithmar at 23%, and 13% held by the general public. The complete tripartite transaction between IHI, Istithmar and Corinthia Palace is expected to be completed in the first quarter of next year.
IHI will also be giving a bonus issue of 5 million shares to the shareholders on the books at end of June 2006. IHI intends to stand in the market with a buy-back programme and offer to buy the bonus shares at par value of 1 Euro. The company will be on the market for six weeks and this move is intended to stabilise the share price.
It is evident that the Corinthia group is succeeding in attracting institutional investors that want to participate in their expansion plan. Corinthia recently signed an agreement with Wyndham Worldwide that includes the branding of Corinthia Hotel. The shareholders that initially invested in IHI shares that were issued to the public are being rewarded with bonus shares – as good as a dividend which has not yet ever been declared by IHI. |
