IHI to acquire majority shares in Corinthia hotels
Corinthia to operate US hotels in Europe, Africa, ME
International Hotel Investments (IHI) is to acquire a majority shareholding in Corinthia Hotels International (CHI), company chairman Alfred Pisani has announced.
Both companies are Corinthia subsidiaries.
IHI, which is currently focused on hotel acquisitions and development, owns 20 per cent of CHI, with the rest of the shares owned directly by the Corinthia parent company. Through this transaction, IHI will be increasing its shareholding in CHI, the hotel management company, to 70 per cent.
Mr Pisani told the annual meeting of IHI on Wednesday that the timing of this acquisition by IHI was coinciding with the acquisition of the remaining 30 per cent in CHI by a major US hotel company.
Agreements in principle had been signed confirming these transactions, and all parties were working towards closing the deal in the coming weeks. Through this transaction, CHI would become the exclusive hotel operator for the US hotel company in Europe, Africa and the Middle East, benefiting from the use of the Corinthia brand name in the five-star deluxe category, as also a number of other renowned brand names owned by the US hotel company in the four and five star categories. All hotels managed by CHI, including the current IHI hotels, would benefit from the US hotel company's full back-up marketing and distribution services, which were among the largest in the world, Mr Pisani said.
He did not name the US company and its name was also not disclosed in a company announcement issued through the stock exchange yesterday.
Mr Pisani pointed out that this was a major breakthrough for IHI, coming soon after the announcement of a strategic partnership with National Projects Holding Company (NPHC) of Kuwait. NPHC has committed to a staged investment in new equity to be issued by IHI totalling €110 million. This will be principally allocated to the acquisition of new properties.
He said it was IHI's aim to acquire hotels that were in full operation and producing immediate returns, rather than commence new construction projects, a strategy that would strengthen the company's immediate profitability.
Joseph Fenech, IHI managing director, said the company expected to make a gross operating profit of €16.3 million this year.