Dubai firm buys €178m stake in IHI

Dubai-based Istithmar Hotels yesterday subscribed to €178 million in new shares issued by IHI, raising IHI's issued share capital to over €0.5 billion.

The funds will be allocated entirely to the further growth of the company by way of new acquisitions and developments of landmark five-star hotels in Europe and beyond, IHI said.

Simultaneous to the issue of the new shares to Istithmar, IHI is also acquiring the Corinthia Bab Africa Hotel & Commercial Centre in Tripoli and the Corinthia Towers Hotel in Prague from the Corinthia Group, principally in return for new shares issued to Corinthia in IHI.

Istithmar Hotels is part of Istithmar, a leading private equity and alternative investment company based in Dubai with global investment interests across various sectors, including hospitality, where Istithmar Hotels is fast establishing itself as a major investor in high-profile properties across the world.

Istithmar is fully owned by Dubai World which in turn is wholly owned by the government of Dubai.

Attending the signing of the agreement with Istithmar Hotels yesterday were Prime Minister Lawrence Gonzi, Khaled Al Kamda, vice chairman of Istithmar and Milad Taleddi of the Libyan Foreign Investment Company.

Alfred Pisani, chairman of IHI, said this was a momentous occasion for a Maltese company.

"Together, we will grow this company into a major hotel company," he said.

Mr Al Kamda, vice chairman of Istithmar, said:

"The investment by Istithmar Hotels in IHI is in line with the Istithmar's strategy of taking major strategic stakes in high quality companies with strong management teams and good growth potential.

Joe Sita, CEO of Istithmar Hotels, said: "We welcome this opportunity to partner and support a company which has a proven track record in acquiring and developing hotels in various countries, including some of the more exciting and fast-growing cities in Europe."

IHI has already announced it will endeavour to obtain a second listing of the company on an international stock exchange within 12 months from this agreement.

IHI was founded in March 2000 by the Corinthia Group and has since acquired and developed five-star hotels in Malta (the Corinthia San Gorg Hotel), St Petersburg (the Corinthia Nevskij Palace Hotel and an adjoining development site), Budapest (the Corinthia Grand Hotel Royal) and Lisbon (the Corinthia Lisboa Hotel), to which are being added the hotels in Tripoli and Prague, besides an anticipated five new acquisitions over the coming months.

IHI has also recently increased its shareholding in CHI Limited, a hotel management company, up to 70 per cent, with the remaining 30 per cent acquired by Wyndham Hotels Group of the United States.

Steven Rudnitsky, president and CEO of Wyndham Hotels Group was present for yesterday's ceremony.