TIDMSSTY
RNS Number : 9627Z
Safestay PLC
17 December 2014
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN
AND SOUTH AFRICA OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OR
SALES WOULD BE PROHIBITED BY APPLICABLE LAW.
Neither this Announcement nor any part of it constitutes an
offer to sell or issue or the solicitation of an offer to buy,
subscribe or acquire any new ordinary shares in the Company in any
jurisdiction in which any such offer or solicitation would be
unlawful and the information contained herein is not for
publication or distribution, directly or indirectly, in or into the
United States, Canada, Japan or any jurisdiction in which such
publication or distribution would be unlawful.
17 December 2014
Safestay plc
("Safestay" or the "Company")
Placing to raise GBP3.3 million
Safestay (AIM: SSTY), the owner and operator of a luxury hostel
brand, is pleased to announce that it has raised approximately
GBP3.315 million (before expenses) by way of a placing by Westhouse
Securities of 6,027,272 new ordinary shares of 1p each ("New
Ordinary Shares") at a price of 55p per New Ordinary Share (the
"Placing Price") with institutional and other investors (the
"Placing"). The New Ordinary Shares will represent approximately
31.3 per cent. of the Company's share capital, as enlarged by the
Placing.
Further to its announcement of 1 December 2014, the Company
intends to use approximately GBP2.0 million of the net proceeds of
the Placing to finance the renovation and refurbishment of its
recently leased Holland Park property. A further GBP0.5 million of
the net proceeds will be used to repay part of the short term loan
provided by Bredbury Limited ("Bredbury") as part of the
consideration for the acquisition by the Company of the York hostel
in May 2014, with the balance being used for working capital
purposes. It is expected that the balance of the short term loan
provided by Bredbury to part finance the acquisition of the York
hostel will be satisfied by an increased debt facility with the
Company's bankers.
Application has been made to the London Stock Exchange for the
6,027,272 New Ordinary Shares, which will rank pari passu with the
Company's existing ordinary shares of 1p each ("Ordinary Shares"),
to be admitted to trading on AIM, which is expected to become
effective at 8.00 a.m. on 22 December 2014 ("Admission").
Safestay Elephant & Castle
For the 11 months to 30 November 2014, occupancy at the hostel
was 79.8 per cent. (2013: 72.5 per cent.). The average bed rate for
the 11 months to 30 November 2014 increased by 10.5 per cent. over
the same period last year. Both of these resulted in an overall
increase in total bed revenue for the 11 months to 30 November 2014
of 22.5 per cent. compared with the 11 months to 30 November 2013.
The property was independently valued at GBP12.3 million on 30
November 2014.
Safestay York
For the 11 months to 30 November 2014, occupancy at the hostel
was 50.6 per cent. compared with 47.2 per cent. in the comparable
period in 2013. Refurbishment and re-branding of the hostel is due
to be completed this month. The property was independently valued
at GBP2.6 million on 30 November 2014.
Safestay Holland Park
Once the property re-opens after a comprehensive renovation and
re-styling in line with the 'Safestay' brand, the Directors expect
strong demand from guests and the potential for enhanced bed rates
due to the property's prime location in the centre of Holland Park,
West London. The leasehold interest of the property was
independently valued at GBP3.4 million on 30 November 2014.
Larry Lipman, Chairman of Safestay commented:
"We are pleased at the level of interest in Safestay's growth
story and the support that we have received from current
shareholders and from new institutional and other investors.
Safestay's principal growth strategy is the roll-out of further
hostels in major European gateway cities. The proceeds from the
Placing will be used to renovate our new Holland Park property,
partly pay down a short term loan and for working capital purposes.
All of which will help the Company to further capitalise on the
significant growth opportunities available in the 'budget'
accommodation segment through the growing recognition of the
'Safestay' brand."
Total Voting Rights
Following Admission, the Company will have 19,244,519 Ordinary
Shares in issue. This figure may be used by shareholders in the
Company as the denominator for the calculations by which they will
determine if they are required to notify their interest in, or a
change to their interest in, the share capital of the Company,
under the Financial Conduct Authority's Disclosure and Transparency
Rules.
A copy of this announcement is available on the Company's
website: www.safestay.co.uk.
For further information:
Safestay
Larry Lipman, Chairman Tel: 020 8815 1600
Colin Stone, Finance Director
Westhouse Securities
Tom Griffiths Tel: 020 7601 6100
David Coaten
Novella
Tim Robertson Tel: 020 3151 7008
Ben Heath
About Safestay:
-- Safestay is a new brand of luxury hostel, designed to appeal
to a broad range of guests. Known as a "boutique hostel" within the
travel industry, it is aimed at providing safe, stylish
accommodation which offers a more attractive alternative to both
traditional hostels and budget hotel accommodation.
-- Safestay's shares were admitted to trading on AIM in May 2014
to widen the shareholder base and raise new equity to support the
roll-out of the Safestay brand.
-- Today, the Group has three sites, two in London and one in
York. Once refurbishments are complete in York and Holland Park,
the Group will have c.1,000 beds to offer to customers.
-- The Group wishes to expand the business by the acquisition
and development of further properties and create a branded hostel
group known for providing safe and stylish, but relatively
inexpensive accommodation.
-- The current hostel market is undergoing substantial change,
after years of little of no investment, the concept of staying in
clean, safe, stylish rooms for an average of approximately GBP20
per person per night has gained momentum and there is, in the
opinion of the Directors, the potential for significant growth and
sector consolidation.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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