The value of the deal has not been disclosed, but at the end of last year Radu Enache, the majority shareholder in the chain, said the hotel’s assets and land were worth EUR140-150 million. This was the book value of the assets established in the wake of an evaluation conducted by authorized assessors, and not the market value.
The chain has a 1,858-room accommodation capacity in several two, three, and four star hotels located in cities such as Arad, Sibiu, Constanta, Targu-Mures and a five-star hotel in Bucharest. Taking into account the number of rooms and the average value of a room, the chain may be worth EUR55 million to EUR95 million, according to ZF calculations.
Continental Hotels is one of the largest domestic hotel groups, owning 14 hotels expected to generate turnover worth EUR21.1 million and EBITDA of EUR5 million this year.
It posted 81.5 million lei (EUR19.3 million) in turnover last year and a net loss of RON20.4 million (EUR4.83 million), according to the Finance Ministry data.
The move is part of GED’s strategy to create the largest travel group in Romania.
GED believes the purchase of the 30% stake in Continental Hotels will help the hotel group accomplish its development plans, given the timing and economic cycle in the region, and the good relationship with the majority shareholder, Radu Enache.
GED had previously owned 20% in Continental Hotels until 2006. Czech investment fund PPF became a Continental Hotels shareholder in 2007.
(English version by Catalina Apostoiu; Editing by Radu Bostan)