MANTRA ADDS HAWAIIAN HOTEL TO ITS PORTFOLIO
Written on the 20 May 2016 by Jenna Rathbone
MANTRA Group (ASX:MTR) has raised more than $100 million to help fund the acquisition of the Ala Moana Hotel in Honolulu, Hawaii.
The Gold Coast-based hotel and resort operator launched a fully underwritten institutional placement, managed by Macquarie and UBS, selling 27 million shares at $3.95 each.
The $107 million raised will go towards acquiring the Hawaiian hotel through a wholly owned subsidiary for $US52.5 million, while additional capital will help fund pipeline opportunities.
The acquisition includes the condominium hotel and freehold title to the reception and administration areas, all car parking, six food and beverage outlets and nine function rooms totalling 1350sqm.
Mantra boss Bob East says the purchase of the 1086-key hotel, which is just a 15-minute walk to the renowned Waikiki Beach, aligns with the group's strategy to expand its presence in key offshore regions.
"The Ala Moana acquisition is an exciting opportunity for the Mantra Group providing a platform to enter a new offshore market with a significant property that is well aligned to Mantra Group's core business, expertise and growth strategy," says East.
"This acquisition complements our existing portfolio and is expected to make significant contribution to Mantra Group's business."
The hotel is expected to contribute around $US7 million in underlying EBITDAI in the first full year of ownership.
Settlement of the acquisition is expected to occur at the end of July this year.
Mantra has also reconfirmed its FY16 profit guidance of EBITDAI between $88.5 million and $90.5 million, which excludes the impact of the new acquisition.
Author: Jenna Rathbone
About: Jenna Rathbone is a Queensland-based journalist who writes on a range of issues including business and property affairs and social issues.Connect via: Twitter