Ian Schrager Hotels, Completes
$475 million Recapitalization
|NEW YORK, Aug. 18, 2004 - The Morgans Hotel Group, formerly known as
Ian Schrager Hotels, today announced that it has completed a $475 million
recapitalization, refinancing all of its third party corporate debt and
all of the debt secured by its Hudson, Royalton, Morgans, Mondrian and
Ian Schrager, president of MHG, said that the new financing package both lowers the cost of MHG's debt and extends the maturities by, at MHG's option, up to five years.
"We are extremely pleased with the new financing package and the way we were able to recapitalize the company," Mr. Schrager said. "Our businesses continue to outperform the market. The completion of this financing is the last step in our program to strengthen the finances and foundation of the company. With this behind us, we can now concentrate all of our energies on growing and further improving the business."
Last month, MHG announced the completion of the sale of a 90% interest in its Paramount Hotel in New York City for $128.5 million to Becker Ventures, a private investment company whose investments have included the Hard Rock Hotel in Chicago.
Just a few days before that, the company announced that it had entered into a sale/leaseback transaction on its San Francisco Clift Hotel with affiliates of Divco West Properties, under which Divco will pay MHG $71 million and MHG will retain a 99 year leasehold, providing MHG any profit that might ensue from operations or a capital transaction.
Clift's plan of reorganization incorporating the sale/leaseback transaction was filed with the United States Bankruptcy Court on June 30, 2004. The plan and the transaction are subject to Court approval. Approval of the plan by the court is expected to occur in September 2004. Clift's plan of reorganization provides for the satisfaction of all of the company's creditors in full.
The financing for MHG's recapitalization was provided by RBS Greenwich Capital, Credit Suisse First Boston, and Blackacre Capital Management.
"We are flattered that such sophisticated investors, after reviewing our financials and business plan, chose to provide the financing for recapitalization plan," Mr. Schrager said.
Morgans Hotel Group
|Also See:||John Unwin Named Senior Vice President for Hotel Operations at Caesars Palace; Leaving Post as Chief Operating Officer for Ian Schrager Hotels / May 2004|
|Divco West Properties Acquires the San Francisco Clift Hotel from Morgans Hotel Group for $71 million; Provides Morgans Hotel Group with 99 Year Leasehold, Likely Emergence from Chapter 11/ July 2004|