IHI, the public company with investments in a number of deluxe hotels in various countries, has announced the issue of new shares to National Projects Holding Company (NPHC), a subsidiary of National Real Estate Company of Kuwait, as part of a strategic partnership aimed at growing IHI through further hotel acquisitions and developments across Europe and the Middle East.
Under the terms of this agreement, IHI will issue 2,000,000 shares to NPHC at a price of e1 each, while simultaneously granting NPHC a six-month window up to October 31 to subscribe to a further 33 million shares in equity at €1 each. Thereafter, NPHC and IHI aim to raise a further €75 million by May 31, 2007 at a price per share to be determined at the time.
The agreement is subject to the waiver of pre-emption rights by the current shareholders. IHI has 139,053,489 shares in issue, of which 78 per cent are held by Corinthia Palace Hotel Company Limited.
Listed on the Kuwait and Dubai Stock Exchange and with a market capitalisation of $US1.5 billion, NREC is a leading real estate company with multinational investments in large developments. Besides, NREC owns a majority shareholding in one of the world's largest logistics and warehousing companies, PWC Logistics, with a turnover of $US 8 billion. The company owns and manages the largest retail malls in Kuwait and has recently signed a strategic partnership with the government of Jordan for the development and management of a 2,000,000 square metre business park.
On its part, IHI was incorporated by the Corinthia Group of Malta in March 2000, to invest and acquire landmark five-star hotels in Europe, the Mediterranean and the Gulf. To date, IHI has completed four major developments, namely the 250-room San Gorg Hotel in Malta, the 414-room Grand Hotel Royal in Budapest, supported by extensive facilities including 26 penthouse apartments, the 517-room Alfa Hotel and Congress Centre in Lisbon, and the 285-room Nevskij Palace Hotel in St Petersburg. The latter is at present is undergoing a fully-funded €75 million extension that will add another 105 executive bedrooms, a conference centre, two shopping malls and an office block for lease to third parties.
IHI also owns equity stakes in Corinthia Hotels International, a management company, and in Quality Project Management Limited, a project construction management company.
In a statement IHI said it now intends targeting further investments, particularly in emerging cities and destinations, and will employ the finances being invested by NPHC towards this objective. Under the terms of the agreement, the parties are also discussing an option establishing a secondary listing of IHI's shares on a major stock exchange.