News for the Hospitality Executive
Orient-Express Hotels Acquiring Two Luxury Hotels on Island of Sicily
Paying a Combined price of $117
million for the 83-key
Grand Hotel Timeo and the 78-key Villa Sant'Andrea
HAMILTON, Bermuda, January 11, 2010 - Orient-Express Hotels Ltd. ( OEH, http://www.orient-express.com), owners or part-owners and managers of 50 luxury hotel, restaurant, tourist train and river cruise properties operating in 25 countries, today announced expansion plans in Italy. The Company has signed a binding agreement to purchase two distinctive properties in Taormina, Sicily from The Framon Group subject to completion conditions.
The 83-key Grand Hotel Timeo is widely considered the most luxurious
hotel in Taormina and the nearby 78-key Villa Sant'Andrea has a private
beach on the Bay of Mazzaro. Under the agreement, scheduled for completion
in late January, Orient-Express Hotels will acquire both properties for
a combined price of EUR81million ($117 million) including the assumption
of existing financing of EUR44 million ($64 million), a new medium term
bank loan of EUR6 million ($9 million) and vendor financing of EUR5 million
($7 million). The Company plans to invest EUR11 million ($16 million) in
a major refurbishment program, to take place over three consecutive winter
closures. The hotels will reopen to Orient-Express Hotels' standard in
time for the 2010 summer season.
Commenting on the transaction, Paul White, President and Chief Executive of Orient-Express Hotels said, "Having significantly strengthened our balance sheet in 2009 through the sale of non-core assets, we have identified this rare opportunity to acquire the internationally renowned Grand Hotel Timeo, with its sister hotel, Villa Sant'Andrea. Elements of this transaction meet every one of Orient-Express Hotels' investment criteria, including the unique and iconic status of the Grand Hotel Timeo; the location of the properties not only in Sicily, one of Italy's fast growing tourist destinations, but in Taormina itself; the financial upside; and of course, barriers to entry.
"These hotels typify Orient-Express Hotels' core business - established properties with history and personality. Currently, they both punch below their weight and because they occupy a premier position in the Sicilian market, we are confident we can make significant improvements in performance, as we integrate the properties into the Orient-Express Hotels collection and bring RevPAR and operating margins in line with our existing Italian portfolio," White continued.
"Our prudent approach to funding this financially accretive acquisition, along with the Company's continued disposal of non-core assets and sales of developed Real Estate, should ensure that we remain on track to achieve our key financial objective of deleveraging the Company's balance sheet by the end of 2011."
Grand Hotel Timeo
The Company anticipates that post refurbishment, The Grand Hotel Timeo will trade at RevPAR levels closer to those of its key Italian properties, Hotel Cipriani in Venice and Hotel Splendido in Portofino. (http://www.grandhoteltimeo.com)
The Company anticipates that the Villa Sant'Andrea will trade, post the refurbishment which will lift it into a category of its own among the beachfront hotels, at RevPAR levels closer to those achieved at its properties Hotel Caruso in Ravello and Villa San Michele in Florence. (http://www.villasantandreahotel.com)
Orient-Express Hotels in Italy
Grand Hotel Timeo and Villa Sant'Andrea have been listed among the World's Best Hotels by readers of Travel and Leisure in both 2009 and 2010. The Andrew Harper Collection rates Grand Hotel Timeo as Sicily's best hotel.
This news release and related oral presentations by management contain, in addition to historical information, forward-looking statements that involve risks and uncertainties.
|Also See:||Orient Express Selling the 85-room Lilianfels Blue Mountains in Australia for US$ 19.3 million / December 2009|