|By Aviv Levy, Globes, Tel Aviv,
IsraelMcClatchy-Tribune Regional News
May 12, 2010--Dan Hotels Corp. Ltd. (TASE: DANH) today signed an agreement to buy the Jerusalem Regency Hotel on Mount Scopus for $47 million, two weeks after announcing talks to do so. The five-star hotel has 505 rooms, and had 228 employees at the end of 2009.
Dan Hotels, controlled by Federmann Enterprises Ltd., deposited $6.4 million with a trustee, which will be transferred to the seller after closure of the sale, handover of the hotel, and cancellation of its current liens in favor of the creditor banks. Dan Hotels said that it has not yet decided how to finance the acquisition.
The Jerusalem Regency Hotel is the only hotel of the Regency chain in Israel. The chain is owned by a group of Jewish investors. Regency put the hotel up for sale after the company's auditor attached a going concern warning to the hotel's financial report for 2009, because of a NIS 87 million working capital deficit.
Dan Hotels' share price rose 1.1 percent on the TASE today to NIS 18.50, giving a market cap of NIS 1.76 billion.
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