The CEO of NH, Ramón Aragonés, has advanced that in July the company will “stop burning cash” and will end up “very close” to achieving positive EBITDA, and that the gross operating profit will fully recover in 2023. This has been done. advanced in the company’s shareholders’ meeting, which has approved the capital increase for a value of up to 107 million euros, where it has indicated that the company expects to register in 2024 income levels similar to 2019 and that it expects to get close to 200 million euros with the sale of assets.
NH is convinced that the refinancing, capital increase and asset rotation measures implemented in these months, and specifically the extension of all its debt maturities to within five years, provide the group with a solid base to face the imminent recovery of the sector after the pandemic.
“NH has reinvented itself as a business model. This will allow us to save 65 million euros in operating expenses to recover the Ebitda levels of 2019 without having to recover income “, explained Aragonés, who explained that the company” aspires to continue growing “in a” without assuming risks “because there is” very good growth opportunities in the sector ”.
The shareholders’ meeting, which was held online this Wednesday, was attended by a total of 68 shareholders (11 present and 57 represented) representing 94.674% of the share capital with voting rights, and it has been approved by majority all the proposals of the board of directors.
Among the most important points on the agenda, the shareholders’ meeting gave a ‘green light’ to the capital increase for an amount of up to 107 million euros by issuing new ordinary shares with a par value of 2 euros each.
Minor International, its main shareholder, has already committed the payment of 100 million corresponding to its participation, while the remaining 7 million may be subscribed by the other shareholders. Aragónes had during its presentation a special thanks to its main shareholder for the unconditional support provided throughout the process in recent months, ensuring that without them “this would not have been possible.”
Among the items on the agenda approved by the shareholders are the annual accounts for the 2020 financial year, the management and corporate governance reports, as well as the management of the board of directors during the past financial year.
Likewise, the amendment of some articles of the company’s bylaws was approved in order to adapt their content, the remuneration policy was approved, as well as the setting of the remuneration of the Board of Directors and its commissions. Four re-elections and a ratification of directors were also approved.
NH announced on Tuesday the closing in the market of an issue of senior guaranteed bonds worth 400 million euros and maturing in July 2026. The funds obtained will be used to amortize the senior bond now existing, worth 357 million euros and maturing in 2023.
In addition to the issuance of the new bond, in which a significant oversubscription has been obtained, has an annual coupon of 4%, the hotel company has agreed to extend its revolving syndicated credit line (RCF) for value of 250 million euros, whose expiration will go from March 2023 to March 2026.
According to NH, meeting these milestones allows the company to reach its goal of extending the maturity of its main sources of financing until 2026 and establishing a more flexible financial structure that allows it to continue with the development of its strategic plan.
“Today NH is a more efficient and much more competitive company than before,” Aragonés assured the company’s shareholders’ meeting, which continues to advance in its process of
asset turnover under sale & lease back formulas, with which he hopes to obtain an after-tax contribution of more than 200 million euros. Aragónes confirmed that it is in advanced negotiations for the sale of the NH Collection Barcelona Gran Hotel Calderón for an approximate amount of 125 million euros, maintaining the operation of the hotel under a long-term rental scheme through the payment of a variable income with a guaranteed minimum . The operation is not completed but could be “in the next few hours.” Furthermore, in the coming months, the company plans to undertake an operation with similar characteristics in Europe.
The executive assured the company’s shareholders that the funds from these divestments will allow NH to strengthen its liquidity in the short term and reduce corporate debt in the medium term. “We are facing five years of tranquility in which we will dedicate ourselves to reducing debt and recovering levels of 2019,” says the manager, who assured that they want to continue growing with the management formula. ANDA total of 20 hotels are planned to open in the coming years with more than 3,700 rooms. “NH is right now in a scenario of absolute financial stability that guarantees the sustainability of the company,” concluded the manager, who assured that the company will dedicate itself in the coming years mainly to recovering income and transferring cash surpluses to the reduction of debt.