Stella sells core assets to reduce debt
Written on the 12 May 2009
THE Stella Hospitality Group continues to hose down concerns that it is facing financial difficulties following the release of some of its core Gold Coast and Port Douglas assets.
The Bob East helmed company has already sold one of its largest overseas holdings, Protea Hotels, which was first acquired by then MFS-controlled Stella Group for $225 million. The recent sale price is undisclosed.
The group has reached an agreement to restructure its debt facility to enhance liquidity and provide for future growth.
“Following discussions with our lender UBS, Stella reached agreement on a restructure of its debt facilities that significantly enhances Stella’s current liquidity position,” says chief financial officer Elizabeth Gaines.
“Stella has a very good relationship with UBS and following the disposal of a number of non-core assets, continues to work on the long-term structure of the group.”
The CVC Asia Pacific majority-owned (65 per cent) company is reportedly in talks with an Asian consortium to snap up more than 20 of its 140-odd management rights businesses CVC outlaid $1.3 billion for a 65 per cent stake in the company in 2007 which included a $409 million cash payment to MFS (now Octaviar) and the assumption of $860 million in debt.
CVC is seeking $249 million in compensation from the embattled Octaviar.
With in excess of 15,000 rooms across more than 140 branded and independent properties, Stella Hospitality Group ranks as the third largest branded hotel operator in Australia.
The Group expects to post record third-quarter results.