5 December 2016 – Expansión
NH is finalising an agreement with the President of Hesperia, José Antonio Castro, which should be signed within the next few days. According to reports from sources close the negotiations, the purpose of the agreement is to renew the hotel chain’s management of almost thirty establishments, owned and operated by Hesperia, for the next nine years.
NH will renew the management of twenty-eight of Hesperia’s hotels, all of which are located in Spain. The agreement also establishes that NH will no longer manage two hotels in Venezuela.
According to the conditions recorded in the memorandum of understanding, NH will pay €31 million for the right to manage Hesperia’s hotels, which will be split into three payments. NH could receive up to €8 million in annual commissions for the management of these properties.
Castro has also committed to investing almost €30 million on the improvement and repositioning of the hotels, and on replacing the Hesperia brand with the NH brand. Moreover, the agreement includes guarantees in the event that Castro does not fulfil some of the clauses set out in the agreement. In this case, NH would have access to a stake in Hesperia’s hotels worth around €40 million.
The negotiations have been going on for almost four months and have been fraught, given that Hesperia is a key shareholder of NH. Hesperia, which first left the management of its hotels in the hands of its investee company, NH, at the beginning of 2009, is the hotel chain’s third largest shareholder with a 9% stake, behind the Chinese group HNA (29.5%) and Oceanwood (12%). The conditions presented by Castro were approved by NH’s Audit Committee, which is chaired by Koro Usarraga Unsain, and received unanimous support from NH’s Board of Directors, in which nine of the eleven members voted, given that neither Castro nor Francisco Javier Illa, who are representatives of Hesperia, participated in the negotiations.
Original story: Expansión (by Rebeca Arroyo)
Translation: Carmel Drake
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Source:: AURA Real Estate Experts