International Hotel Investments (IHI) shareholders yesterday approved all the resolutions raised at an extraordinary general meeting, which are expected to pave the way for an ambitious expansion programme.
Yesterday’s full-house EGM dealt with the matter of the implementation of a subscription agreement signed in early December between IHI, the Corinthia Palace Hotel Company Limited and Istithmar Hotels FZE of Dubai.
The agreement will see Istithmar taking up a 33 per cent stake in IHI through a e178 million cash injection, which will in turn allow the company to begin implementing its expansion plans with a total of e537 million in new capital and loans. The Corinthia Palace Hotel Company will retain a 58 per cent stake in IHI, while the remaining nine per cent of the company is held by the public.
Addressing yesterday’s EGM, IHI chairman Alfred Pisani explained how the company is in active talks with a view to acquiring up to five new hotels. The company intends not straying from its previous practice of seeking out low to medium risk countries in which to purchase and operate its hotels, and is targeting Europe and beyond within the scope.
The company is at present actively engaged in talks over a total of 12 properties in eastern and central Europe in countries such as Poland, the Baltic States, the Ukraine, Croatia and Russia, while it is also involved in ongoing discussions over properties in the UK and France.
Shareholders yesterday approved a total increase in the company’s authorised share capital to one billion shares, of one euro each.
They also waived their pre-emption rights to an issue of 178 million new shares to Istithmar in return for a cash injection in IHI, which will be utilised to fund the acquisition and development of the new hotels.
Shareholders also waived their rights on the issue of 192 million new shares to Corinthia Palace Hotel Company, as part of the purchase price of the Corinthia Bab Africa Hotel in Tripoli and the Corinthia Towers Hotel in Prague.
Shareholders also approved the issue of up to five million shares from the company’s revaluation reserves, which will be issued to shareholders who were on the register on 30 June 2006, while the Corinthia Palace Hotel Company waived its rights to the bonus shares. The issue of shares to Istithmar, CPHCL and the bonus shares, which will be distributed on a one-for-six basis, will take place simultaneously. Shareholders will have the option to either retain the bonus shares or return them to the company for the price of e1 each. Since the bonus shares will be released from the company’s reserves, and as such do not constitute a distribution, the sell-back of bonus shares will be exempt of taxes and fees.
The issue of shares to Istithmar and Corinthia Palace Hotel Company, however, are still subject to technical criteria, standard regulatory approval and a due diligence exercise.
Speaking yesterday, Mr Pisani commented that the Istithmar deal is scheduled to close on 29 March but stressed that he “would like to see that date brought forward”.
Referring to a possible second stock market listing for the company on a foreign market, Mr Pisani indicated the manoeuvre was a serious possibility and that the company is considering the pros and cons of such a move.
The resolutions also contemplated certain changes to the company’s memorandum and articles of association, mainly related to corporate governance, introducing a list of reserved matters requiring thresholds at shareholder and board level for approval, as the introduction of a dividend policy guideline.