27 February 2015 – Cinco Días
The transaction amounts to €176 million.
Melia and Starwood Capital are going to create a joint venture for the purchase and operation of seven of the hotel chain’s establishments. The fund and the hotel chain will take an 80% and a 20% stake, respectively, in the new company, in a deal worth €176 million. The partnership has been made public in the same week that Barceló and Hispania announced the creation of the first Socimi in Spain dedicated exclusively to the vacational hotel sector, which will acquire up to 16 of the Mallorcan chain’s hotels.
The transaction will (also) serve to relaunch the Sol brand. In this way, the seven acquired hotels will be remodelled, which will require an investment of €30 million. Four of the establishments are located in the Balearic Islands, another two in the Canary Islands and one on the Costa del Sol.
Melia will operate the seven hotels for the next 15 years. According to the Relevant Fact submitted to the CNMV, the hotel transfer is pending the agreement of bank financing. Both sides hope to have the process completed by May.
The transaction will generate gains of €35 million for Melia and forms part of the company’s debt reduction program through the rotation of assets. The CEO of Melia, Gabriel Escarrer, said in January that the company expected to spend around €100 million on the rotation of assets this year.
Original story: Cinco Días
Translation: Carmel Drake