Fattal sells and leases back Berlin hotel

David Fattal Photo; Eyal Izhar

The Israeli hotel chain has increased liquidity by selling and leasing back the Leonardo Royal Berlin Hotel for NIS 230 million.

Fattal Holdings (1998) Ltd. (TASE: FTAL) unit Fattal (Properties) Europe Ltd. (TASE: FTEU) has sold a hotel in Berlin. The company notified the Tel Aviv Stock Exchange (TASE) this morning that it had signed a binding agreement to sell and lease back the Leonardo Royal Berlin Hotel for NIS 230 million (€57.4 million). The deal is expected to yield a net cash flow of NIS 76 million (€19 million).

As part of the agreement, the parties signed a 25-year leasing agreement (with an option for an additional five years) with Fattal not paying any rent until the end of 2020.

From 2021, Fattal will pay rent of 60% of its net operational profit (NOP) and from 2022 it will pay a fixed rent €2.9 million or 24% of revenue (whichever is higher) and from 2023 Fattal will pay a fixed rent €3 million or 24% of revenue (whichever is higher).

Fattal CFO Shahar Aka said, "The Leonard Royal Hotel Berlin is one of the first hotels that Fattal bought in Europe and it is in a very attractive location in the city. I say this to stress that the chain is likes its properties and will do everything required to get through the current period which has been forced upon it and its employees. The sale of the hotel will generate an additional cash flow of NIS 76 million and is part of our strategic plan to increase the Group's liquidity. The sale can be added to other actions to reduce expenditure and increase the company's cash flow."

Last week Fattal completed aq rights issue and raised NIS 99 million, of which controlling shareholder David Fattal, invested NIS 57 million.

Fattal is also in talks for two more sale and lease back deals for a hotel in the Netherlands and a hotel in Munich. The company is also considering issuing a new series of bonds worth NIS 200 million.

Published by Globes, Israel business news - en.globes.co.il - on July 30, 2020 © Copyright of Globes Publisher Itonut (1983) Ltd. 2020

David Fattal Photo; Eyal Izhar
David Fattal Photo; Eyal Izhar
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