Safestay PLC Acquisition (6180G)
May 31 2017 - 2:00AM
UK Regulatory
TIDMSSTY
RNS Number : 6180G
Safestay PLC
31 May 2017
The information contained within this announcement is deemed by
the Group to constitute inside information as stipulated under the
Market Abuse Regulations (EU) No. 596/2014 ("MAR").
31 May 2017
Safestay plc
("Safestay", the "Company" or the "Group")
European Hostels Acquisition
Safestay (AIM: SSTY), the owner and operator of a new brand of
contemporary hostel, is pleased to announce that it has entered
into a debt financing agreement with Equity Point Hostels ("Equity
Point") that will see the Group make an immediate payment to Equity
Point of EUR3.6 million structured by way of debt, in return for
security over 90% of Equity Point's share capital, valued at
approximately EUR10 million. Equity Point is a pan European hotel
& hostel group, which owns and operates 7 hotels and hostels
across Europe. Following the satisfaction of certain completion
mechanics, it is anticipated that Safestay will ultimately be
assigned 100% of the operating leases pertaining to three hostels
owned by Equity Point, as redemption of the EUR3.6 million
loan.
Through this two stage acquisition structure, the portfolio of
sites to be acquired by the Group contains one hostel in Barcelona,
one in Prague and one in Lisbon, consistent with Safestay's
strategy to establish a presence in leading European gateway
cities. The hostels are being acquired on operating leases to 2028
(Prague), 2031 (Barcelona) and 2029 with subsequent automatic
5-year renewal periods (Lisbon). The effective consideration for
the acquisition is EUR3.6 million which will be satisfied from the
Group's existing cash resources.
For the financial year ended 31 December 2016, the three hostels
generated sales of EUR1.6 million and EBITDA of EUR0.4 million.
Larry Lipman, Chairman of Safestay, said:
"The acquisition of these three sites, together with the U
Hostels acquisition we announced earlier this month, means we have
increased our portfolio from 4 to 10 hostels. Most importantly,
however, we have acquired sites in excellent locations, namely:
Madrid, Barcelona, Paris, Prague and Lisbon. A strong line up and a
natural fit with our existing sites in London, York and
Edinburgh.
These three hostels, being already operational, will immediately
add to our operating platform and significantly enhance our overall
offer. We look forward to completing the transaction and
integrating the new sties into the enlarged Safestay business."
- ENDS -
Enquiries
+44 (0) 20 8815
Safestay plc 1600
Larry Lipman, Chairman
Canaccord Genuity Limited +44 (0) 20 7523
(Nominated Adviser and Broker) 8000
Bruce Garrow
Chris Connors
Ben Griffiths
Novella
+44 (0) 20 3151
Tim Robertson 7008
Toby Andrews
For more information visit: www.safestay.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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