Hilton enters sale and turnover leaseback on ...

Hilton Enters Sale and Turnover Leaseback on Ten UK Hotels Hilton Group plc ("Hilton") has today completed the sale of 10 UK hotels (2,043 rooms) to a Limited Partnership for a cash consideration of £335.7m and entered into 27 year turnover based operating leases on the properties. Hilton has retained a 40% interest in the Limited Partnership (see note 1) for an equity investment of £25m. The remaining 60% is owned by a separate limited partnership between Rotch Group, Farnsworth Group and Bank of Scotland plc. Under the agreement, the rentals are based on an average of 28.8% of hotel turnover, plus £3.1m per annum, with a guaranteed minimum rent of £17.5m per annum, which will be subject to an annual RPI adjustment capped at 5%. Additionally, Hilton has provided a turnover rent warranty on the portfolio to 31 December 2004. The budgeted revenues for these hotels for the 12 months ending 31 December 2002 would result in a rental obligation of £23.6m. The hotels had a net book value of £297.4m at 31 December 2001 and made an EBITDA contribution of £33.0m for the year then ended. The net proceeds from the sale will be used to reduce net borrowings within Hilton. David Michels, Chief Executive, Hilton Group plc, said: "Today's announcement is in line with our stated strategy and follows on from the successful transaction with the Royal Bank of Scotland last year. We are satisfied with the achieved price of £164k per room." Note 1: A Rotch / Farnsworth entity has operational control over the partnership. High resolution Hilton hotel images and key personnel are available for the media to download and print free of charge at www.vismedia.co.uk For Further information please contact: David Michels, Group Chief Executive, Hilton Group plc Brian Wallace, Deputy Group Chief Executive and Group Finance Director, Hilton Group plc Alex Pagett, Corporate Affairs Director, Hilton Group plc James Mason, Investor Relations Manager, Hilton Group plc Tel: 020 7856 8109 / 07974 229 888 Note to Editors The portfolio of hotels sold is as follows: Hotel Number of Rooms Cobham 155 Croydon 168 East Midlands Airport 152 Kensington 603 Leeds City 206 Northampton 139 Nottingham 177 Tewkesbury 112 Watford 201 York 130 Total 2,043 ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://www.waymaker.net/bitonline/2002/08/30/20020830BIT00490/wkr0001.doc http://www.waymaker.net/bitonline/2002/08/30/20020830BIT00490/wkr0002.pdf

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