Orient-Express Provides Update on Strategic Actions That Drive Value and Further Enhance Unparalleled Portfolio of Luxury Properties
- Completes sale of The Westcliff, Johannesburg
- Enters into agreement to sell Porto Cupecoy, Sint Maarten
- Combined cash price for both transactions of $45.0 million
- Re-opens main building of Copacabana Palace, Rio de Janeiro after extensive renovation
- Announces renovation plans at Grand Hotel Europe, St. Petersburg and Charleston Place, South Carolina
"We are moving forward aggressively in executing our portfolio optimization strategy. Consistent with our ongoing focus on redeploying capital into core, high-value properties, we intend to use the proceeds from the divestitures of The Westcliff and the Porto Cupecoy residential project to provide capital for our active re-investment program, which is designed to drive revenue growth and substantial incremental value from our one-of-a-kind properties and to further strengthen our financial position," saidJohn M. Scott, President and Chief Executive Officer.
Mr. Scott continued: "The performance of our two recently refurbished Sicilian hotels - Grand Hotel Timeo and Villa Sant'Andrea - which delivered year-over-year local currency REVPAR growth of 25% for the nine months endedSeptember 30, 2012despite the challenging economic environment inEurope, shows the significant benefits of our portfolio re-investment strategy. In addition, the renovation of the main building of Copacabana Palace, one of our premier properties andSouth America'smost famous hotel, puts us in an excellent position to capitalize on the growing Brazilian market and the upcoming World Cup and Olympics."
Completion of Sale of The Westcliff, Johannesburg
The Company has closed the previously announced sale of The Westcliff,Johannesburg. The purchaser, a joint venture partnership between Albwardy Investment, aDubai-based private investment company, and Hotels Properties Limited, based inSingapore, will retain Orient-Express as the manager of the hotel for a period of up to 12 months from closing while the new owner develops its long-term refurbishment plans.
Sale Agreement for Porto Cupecoy,Sint Maarten
Orient-Express has executed a definitive agreement to sell Porto Cupecoy, a real estate development inSint Maarten, to a local buyer. Orient-Express has retained ownership of four condominium units that were not part of the purchase agreement but are under contract. The principal transaction is expected to close within the next 30 days.
The combined price of both transactions is$45.0 millionin cash, with net proceeds of$41.1 millionavailable to the Company for general corporate purposes. The proceeds from the pending sale of the four condominium units at Porto Cupecoy are expected to contribute an additional$3.9 millionto this total.
Completion of Renovation of the Main Building of Copacabana Palace, Rio de Janeiro
Orient-Express has completed the final phase of an approximate$20.0 millioncomprehensive refurbishment program at the main building of Copacabana Palace, a landmark property on Copacabana beach inRio de Janeiro. With a first phase in 2011, this program included the refurbishment of all 145 rooms and suites in the main building and significant enhancements to the lobby and public areas. This iconic hotel is now fully operational and strong growth in 2013 is anticipated.
Renovations at Grand Hotel Europe,St. Petersburgand Charleston Place,South Carolina
During 2013, the Company plans to commence significant enhancement programs at two of its top-producing properties. At the iconic Grand Hotel Europe inSt. Petersburg, Russia, the Company will start a three-year project that will include the conversion of 19 rooms into six ultra-luxurious suites, including a two-bedroom presidential suite, a new food and beverage concept from a world-class restaurant designer, a fully renovated and expanded spa, and improved meeting rooms. The Company is arranging a new$50.0 millionloan agreement, which will provide$26.0 millionfor the renovation project,$5.2 millionfor the repayment of debt and costs, and the remaining$18.8 millionfor general corporate purposes.
Also during 2013, the Company will initiate a phased, three-year rooms refurbishment at Charleston Place, which is one of Orient-Express' largest cash producers. In the first phase, which will be carried out over four months during the hotel's low season, the Company will renovate 145 keys. This phase is expected to be partially funded by$9.2 millionof additional borrowings on the hotel's existing loan facility.