Accor enters into EUR272m real estate transaction in French budget segment

Tue. September 22, 2009; Posted: 07:26 AM

Sep 22, 2009 (M2 EQUITYBITES via COMTEX) -- ACCP | Quote | Chart | News | PowerRating -- Accor (Nasdaq-OTCBB:ACCP) (Euronext:120140) has entered into a major real estate transaction in the budget segment in France for EUR272m, the company said today.

The transaction is the sale of 158 hotelF1 properties, representing a total of 12,300 rooms. Formule 1, renamed hotelF1 in 2007, is the entry-level hotel brand of Accor Group in France with an average room rate of around EUR33.

This sale and variable leaseback transaction was carried out with a consortium of leading French institutional investors through a property investment trust (OPCI).

With the sale of the hotel units for EUR272 million, Accor signed a 12-year business lease, renewable six times at Accor's option. The variable rents are based on an average 20% of revenue with no guaranteed minimum. Based on 2008 revenue, the variable rent would have been EUR21.3m.

Accor said that this transaction will enable it to reduce its adjusted net debt by approximately EUR187m in 2009, of which EUR130m will be added to the group's cash reserves.

Also, the transaction will have a positive impact of roughly EUR5m on profit before tax.

Following the sale, Accor will continue to operate the 158 hotels under the hotelF1 brand.

This sale and variable leaseback transaction was carried out with a consortium of leading French institutional investors through a property investment trust (OPCI).

Accor is a hotel group, as well as a provider of services to corporate clients and public institutions.

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