Bank Hapoalim increases facility to cover development of Park Plaza Westminister

International hotel and resorts group Park Plaza has announced that its subsidiary, Marlbray, has signed an agreement with Bank Hapoalim to increase the size of its facility for the Park Plaza Westminster Bridge project in London to buy for the total development cost.

At a time when many banks are scaling back or stepping away completely from property development finance in the UK, Tel Aviv- and Lonon-listed Bank Hapoalim has agreed to increase the existing facility of £221 mln (EUR 242 mln) to £248 mln (EUR 272 mln). The move ensures the project is completed, safeguarding the bank's investment to date.

Park Plaza said the original loan, of which £180.5 mln has been drawn down as at 31 March 2009, carries an interest rate of LIBOR plus 2.15% and its term remains to completion of the project. The additional £27 million, which covers the development costs of the additional floor and a further banqueting space, carries an interest rate based on LIBOR plus 3% and its term is also to completion of the project. The hotel group said 818 of the 1,021 rooms at the Park Plaza Westminster Bridge have been sold and the EUR 53.6 mln of deposits received are held on the balance sheet as restricted deposits which are excluded from the group's EUR 54.6 mln of liquid assets.

The financing for the project is secured against these sales.

In march, Plaza released its preliminary results for the year ended December 31 2008. The group's net debt at the financial year end was EUR 282 mln, compared to EUR 268 mln at end-June 2008.