InterContinental
Hotels Group PLC (IHG) has agreed to sell InterContinental London
Park Lane (“the Hotel”) to Constellation Hotel (Opco) UK S.A.,
which is an affiliate of Constellation Hotels Holding Limited, a
Middle Eastern private investment group.
IHG’s
leasehold interest in the Hotel has been sold for gross cash proceeds
of £301.5m ($457m*), 62% above 31 December 2012 net book value.
IHG
has secured a 30 year management contract on the Hotel, with three
ten year extension rights at IHG’s discretion, giving an expected
contract length of 60 years. Management fees are expected to be
approximately £4m ($6m*) per annum.
The
Hotel was opened in 1975 as a purpose built InterContinental and has
been wholly owned by IHG since 1999. The Hotel generated revenues of
$89m, EBITDA of $39m and EBIT of $33m in 2012.
The
transaction is expected to complete in the second quarter of 2013,
subject to the satisfaction of certain standard conditions. The
proceeds will be used for general corporate purposes, with £61m
($93m*) used to provide security over UK pension liabilities which
were previously secured against the hotel.
IHG
indicated in November 2012 that the Hotel would be the next major
asset considered for sale and announced on 19 February that the Hotel
was being actively marketed for disposal. Since becoming a standalone
company in April 2003, on completion of this disposal IHG will have
sold 191 hotels for proceeds of $6.1bn.
