Fattal sells 2 hotels in Germany for NIS 305 million – the capital market

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Fattal Holdings
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Reports that it has signed purchase and lease agreements back to two hotels in Munich, in exchange for about NIS 305 million, of which NIS 16 million for renovations. The sale will leave the company with a net cash flow of approximately NIS 130 million.

As part of the deal, Fattal’s management company in Germany, Sunflower, signed a lease agreement with the buyer, according to which the two hotels, Leonardo Hotel Residence Munich and Leonardo Hotel City West, which have 368 rooms, will be rented for 25 years. The annual rent will be about 2.52 million euros for the Leonardo Residence Hotel, and about 0.93 million euros for the Leonardo City West Hotel. It should be noted that the company received a discount due to the corona crisis, which is expressed in a payment of only 1.78 million euros per year, for a period of 21 months. Completion of the transaction is subject to a number of conditions precedent.

The chain’s operations in Europe include 169 hotels (including hotels under construction). The hotels are located in the following countries: Germany, the United Kingdom (including England, Scotland, Wales and Northern Ireland), Ireland, Spain, Belgium, Italy, Cyprus, Greece, the Czech Republic, the Netherlands, Switzerland, Poland, Portugal, Hungary and Austria. The chain’s largest hotel concentration is in Germany, where the chain has 68 hotels, and the United Kingdom (including Ireland) is considered to be the second largest chain of hotels in Europe, where the chain has 52 hotels.

Shahar Aka, director and CFO: “The sale of the hotels will create an additional cash flow of about NIS 130 million net and is part of our strategic plan to increase the liquidity of the group, which so far has managed to raise over NIS 1.5 billion for its coffers.

In this transaction, we located an opportunity for the sale of the hotels in a sale and leaseback deal on favorable terms and reduced rents of approximately 1.78 million euros per year, for a period of 21 months. At the same time, the company’s hotels in Israel have opened according to the purple mark and we are witnessing great demand. We will continue to operate according to our strategic plan to increase cash flow and reduce expenses until we return to normal operations. ”