“The funds received will be used to restructure debt service and for the company’s operating needs,” Continental officials said.
Continental Hotels posted EUR19.4 million in revenue and a loss of EUR4.8 million in 2010, according to Finance Ministry data. The hotel group’s debt stands at EUR35 million, while assets are worth between EUR150 million and EUR160 million.
Continental Hotels is at its fifth sale&lease back contract in the last four years. Sale&lease back contracts entail sale of the building, after which the seller retains the right to use it in exchange for rent, based on a long-term leasing contract. The Ibis Hotel in Sibiu will be bought back in fifteen years.
The businessman has sold several hotels via sale&lease back contracts worth EUR35 million to get cash over the past four years.
He had been negotiating the sale of three star Ibis in Sibiu and Continental in Targu Mures (central and north-central Romania) since the beginning of the year in order to get money for his investment and development plans.
Another building sold via such a contract in Romania this year is an office building on Bucurestii Noi Boulevard (northern Bucharest), owned by a company registered in Cyprus. The deal by which BRD Sogelease IFN bought the building amounted to EUR4.59 million. BRD Sogelease is the financial leasing unit of BRD-Groupe Societe Generale.
Continental Hotels is one of the largest hotel groups on the local market, which owns 14 hotels expected to generate EUR21 million in revenue this year.
(English version by Loredana Fratila-Cristescu)