5th Jul 2017 07:00
This announcement contains inside information
Action Hotels plc
("Action Hotels" or the "Company")
Related Party Loan Arrangements
Existing Loans
Action Hotels, the leading owner, developer and asset manager of branded three and four-star hotels in the Middle East and Australia reports that during the period from 22 November 2016 to 30 June 2017, the Company entered into a number of loan agreements (the "Existing Loans") all of which are detailed in the table below.
All of the lending parties (the "Existing Lenders") are ultimately controlled by Sheikh Mubarak A. M. Al Sabah ("Sheikh Mubarak"), the Chairman of, and a major shareholder in, Action Hotels. The Existing Loans that have already been entered into are drawn down in the aggregate amount of approximately US$15.6m, all of which has been invested into the development of Action Hotels' current hotel portfolio.
Lending party | Jurisdiction | Date of agreement | Amount of loan(US$) | Current amount outstanding (US$) | Aggregate amount(US$) |
Action Group Australia Pty Ltd | Australia | 22 Nov 2016 | 422,183 | 249,472 | 249,472 |
Water Front Place Development Trust | Australia | 22 Nov 2016 | 2,533,096 | 2,295,139 | 2,544,611 |
Action Real Estate Company K.S.C.C | Kuwait | 15 Dec 2016 | 2,007,440 | 2,007,440 | 4,552,051 |
Action Real Estate Company K.S.C.C | Kuwait | 9 Feb 2017 | 591,056 | 591,056 | 5,143,107 |
Action Real Estate Company K.S.C.C | Kuwait | 7 Mar 2017 | 4,736,122 | 4,275,559 | 9,418,666 |
Action Group Holding Company K.S.C.C | Kuwait | 2 May 2017 | 266,667 | 266,667 | 9,685,333 |
Action Group Holding Company K.S.C.C | Kuwait | 2 May 2017 | 67,000 | 67,000 | 9,752,333 |
Action Real Estate Company K.S.C.C | Kuwait | 6 Jun 2017 | 4,000,000 | 4,000,000 | 13,752,333 |
Action Group Holding Company K.S.C.C | Kuwait | 21 Jun 2017 | 103,957 | 103,957 | 13,856,290 |
Action Group Holding Company K.S.C.C | Kuwait | 22 Jun 2017 | 1,754,268 | 1,754,268 | 15,610,558 |
The Existing Loans are all unsecured, and bear interest at a rate of 9.9% per annum, which the board considers to be competitive compared to alternative offers received. When they were entered into, the Existing Loans were all repayable after 6 months (and those that have expired have been extended by mutual agreement).
Master Loan Facility
Action Hotels is pleased to announce that on 4 July 2017, it entered into a master loan facility agreement (the "Facility") with Action Group Holding Company K.S.C.C (the "Main Lender") under which Action Hotels can draw down up to US$25m for investment in its hotel development pipeline and for general working capital purposes. The Main Lender is controlled by Sheikh Mubarak, and all of the Existing Lenders are subsidiaries or affiliated companies to the Main Lender.
The Facility includes all amounts drawn down under the Existing Loans, meaning that there is currently approximately US$9.4m of further funds available to Action Hotels under the Facility.
All amounts drawn down under the Facility, which is unsecured, are on similar terms to the Existing Loans and will attract interest at a rate of 9.9% per annum, and are repayable within 6 months of drawdown date (the "Repayment Date"). The Repayment Date can be extended by mutual consent of the parties and Action Hotels is entitled to repay all amounts borrowed under the Facility at any time without penalty. Going forward the Existing Loans will be governed by the Facility and drawdown dates are to be mutually agreed by both parties.
The Existing Loans and the Facility constitute related party transactions under AIM Rule 13 of the AIM Rules for Companies as Sheikh Mubarak is both a controller of each of the Main Lender and the Associated Lenders, and a major shareholder and non-executive chairman of Action Hotels. The independent directors of the Company, having consulted with the Company's nominated adviser, Zeus Capital Limited, consider that the terms of the Existing Loans and of the Facility are fair and reasonable insofar as its shareholders are concerned.
Alain Debare, Chief Executive Officer, Action Hotels commented:
"We remain grateful for the continued support of our main shareholder and are delighted to have secured a flexible facility for the Company at competitive rates, which enables us to continue the development of our hotel pipeline in line with our strategy."
For more information contact:
Action Hotels PLC | Tel: +44 (0) 20 7907 9663 |
Alain Debare, Chief Executive Officer | |
Katie Shelton, Director of Corporate Affairs |
Zeus Capital Limited (Nomad and Broker) | |
Dan Bate / Andrew Jones | Tel: +44 (0) 161 831 1512 |
Victoria Ayton | Tel: +44 (0) 20 3829 5000 |
Camarco (Press enquiries) | Tel: +44 (0) 20 3757 4994 |
Jennifer Renwick / Tom Huddart |
Notes to Editors
Action Hotels PLC
Action Hotels PLC is a leading owner, developer and asset manager of branded three and four star hotels in the Middle East and Australia. Established in 2005, Action Hotels currently has 12 completed hotels with 2,181 rooms in aggregate across the Middle East and Australia, with further properties in development in both regions.
More information is available at http://www.actionhotels.com/
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