Norwegian Property (NPRO) said on Monday its board of directors has decided to cease negotiations with the consortium of unnamed buyers regarding the sale of Norgani Hotels. In a statement, NPRO said it plans to maintain ownership of Norgani but added it will continue to investigate disposal possibilities as the company has been contacted by several potential 'attractive' partners and/or buyers of Norgani.
Norwegian Property (NPRO) said on Monday its board of directors has decided to cease negotiations with the consortium of unnamed buyers regarding the sale of Norgani Hotels. In a statement, NPRO said it plans to maintain ownership of Norgani but added it will continue to investigate disposal possibilities as the company has been contacted by several potential 'attractive' partners and/or buyers of Norgani.
Earlier this month Norwegian Property said it had signed a letter of intent with an unnamed group of buyers regarding the sale of Norgani for EUR 1.4bn, but the unnamed bidders pulled out of the deal last month as they failed to make an offer during the exclusivity period which ran until mid-May. Norgani Hotels is owned by Oslo Properties, an investment company in which Norwegian Property has a 17.5% stake and rights to buy more than 90%.
NPRO added that it is proposing an extraordinary general meeting on June 17 to settle all its obligations with partners in Oslo Properties, including Sweden-based private equity firm EQT and other financial investors. The company plans to launch a share capital increase in the form of a EUR 314mln rights issue. About two-thirds of the share issue will be used to pay back EQT and other investors, while the remainder will be used to strengthen the balance sheet, NPRO said in a statement. After the share issue, the company will have a Loan To Value (LTV) of approximately 70%, down from 80% in the first quarter of the year. The share issue will be carried out at a price of NOK 26.00 per share, which reflects a discount of about 26% from the closing price on May 29, 2008.
