Sales and purchase agreement for Norgani Hotels signed
On 24 August 2010, Norwegian Property announced that its subsidiary, Oslo Properties AS had entered into a preliminary agreement to sell its wholly owned subsidiary Norgani Hotels AS. The buyer is Sech Holding AB, a company under joint ownership and control by Pandox AB and Heches Holding AB, which is controlled by Eiendomsspar AS and the Sundt family. The transaction comprises the hotel real estate business of Norwegian Property, and is an important step for Norwegian Property in creating a more focused company with a stronger operational and financial platform for profitable growth.
As previously communicated, completion of the transaction was contingent upon i.a. the parties agreeing a full board approved sales and purchase agreement, completion of debt financing and approvals by relevant competition authorities. These conditions precedent for closing of the transaction have now been satisfied, and the parties have today executed an unconditional sales and purchase agreement.
As previously announced, Norwegian Property has agreed to provide vendor financing of NOK 600 million to the buyer, of which NOK 200 million will mature after two years and the remaining NOK 400 million after five years. The vendor financing is secured by first priority pledge in the Norgani Hotel AS' shares and guarantees from Pandox AB and Heches Holding AB. Both tranches have a fixed interest rate of 5% p.a.
Norwegian Property has an option until 31 December 2010 to purchase back a minority share of up to 9.9% of the share capital of Norgani Hotels at the buyer's cost price (including the buyer's costs in connection with the transaction).
The commercial terms of the transaction are in line with the preliminary agreement. Norwegian Property will see a cash release of approximately NOK 1,620 million, of which NOK 600 million will remain as vendor financing and NOK 682 million will be used for full and final repayment of the OPAS acquisition facility. In the P&L accounts for the third quarter 2010, Norgani Hotels will be accounted for as discontinued operations with a net result after tax of NOK -944 million.
Closing of the transaction will take place during November 2010.
ABG Sundal Collier and Thommessen are acting as advisors for NPRO in connection with the transaction.
For further information, please contact:
Norwegian Property ASA
CEO Olav Line +47 48 25 41 49 or
CFO Svein Hov Skjelle +47 93 05 55 66