Action Hotels PLC Related Party Loan Arrangements (1293K)

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RNS Number : 1293K

Action Hotels PLC

05 July 2017

This announcement contains inside information

Action Hotels plc

("Action Hotels" or the "Company")

Related Party Loan Arrangements

Existing Loans

Action Hotels, the leading owner, developer and asset manager of branded three and four-star hotels in the Middle East and Australia reports that during the period from 22 November 2016 to 30 June 2017, the Company entered into a number of loan agreements (the "Existing Loans") all of which are detailed in the table below.

All of the lending parties (the "Existing Lenders") are ultimately controlled by Sheikh Mubarak A. M. Al Sabah ("Sheikh Mubarak"), the Chairman of, and a major shareholder in, Action Hotels. The Existing Loans that have already been entered into are drawn down in the aggregate amount of approximately US$15.6m, all of which has been invested into the development of Action Hotels' current hotel portfolio.

 
 Lending party         Jurisdiction    Date                Amount        Current    Aggregate 
                                        of agreement      of loan         amount       amount 
                                                            (US$)    outstanding        (US$) 
                                                                           (US$) 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Action Group 
  Australia                            22 Nov 
  Pty Ltd              Australia        2016              422,183        249,472      249,472 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Water Front 
  Place Development                    22 Nov 
  Trust                Australia        2016            2,533,096      2,295,139    2,544,611 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Action Real 
  Estate Company                       15 Dec 
  K.S.C.C              Kuwait           2016            2,007,440      2,007,440    4,552,051 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Action Real 
  Estate Company                       9 Feb 
  K.S.C.C              Kuwait           2017              591,056        591,056    5,143,107 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Action Real 
  Estate Company                       7 Mar 
  K.S.C.C              Kuwait           2017            4,736,122      4,275,559    9,418,666 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Action Group 
  Holding Company                      2 May 
  K.S.C.C              Kuwait           2017              266,667        266,667    9,685,333 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Action Group 
  Holding Company                      2 May 
  K.S.C.C              Kuwait           2017               67,000         67,000    9,752,333 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Action Real 
  Estate Company                       6 Jun 
  K.S.C.C              Kuwait           2017            4,000,000      4,000,000   13,752,333 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Action Group 
  Holding Company                      21 Jun 
  K.S.C.C              Kuwait           2017              103,957        103,957   13,856,290 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 Action Group 
  Holding Company                      22 Jun 
  K.S.C.C              Kuwait           2017            1,754,268      1,754,268   15,610,558 
--------------------  --------------  ---------------  ----------  -------------  ----------- 
 

The Existing Loans are all unsecured, and bear interest at a rate of 9.9% per annum, which the board considers to be competitive compared to alternative offers received. When they were entered into, the Existing Loans were all repayable after 6 months (and those that have expired have been extended by mutual agreement).

Master Loan Facility

Action Hotels is pleased to announce that on 4 July 2017, it entered into a master loan facility agreement (the "Facility") with Action Group Holding Company K.S.C.C (the "Main Lender") under which Action Hotels can draw down up to US$25m for investment in its hotel development pipeline and for general working capital purposes. The Main Lender is controlled by Sheikh Mubarak, and all of the Existing Lenders are subsidiaries or affiliated companies to the Main Lender.

The Facility includes all amounts drawn down under the Existing Loans, meaning that there is currently approximately US$9.4m of further funds available to Action Hotels under the Facility.

All amounts drawn down under the Facility, which is unsecured, are on similar terms to the Existing Loans and will attract interest at a rate of 9.9% per annum, and are repayable within 6 months of drawdown date (the "Repayment Date"). The Repayment Date can be extended by mutual consent of the parties and Action Hotels is entitled to repay all amounts borrowed under the Facility at any time without penalty. Going forward the Existing Loans will be governed by the Facility and drawdown dates are to be mutually agreed by both parties.

The Existing Loans and the Facility constitute related party transactions under AIM Rule 13 of the AIM Rules for Companies as Sheikh Mubarak is both a controller of each of the Main Lender and the Associated Lenders, and a major shareholder and non-executive chairman of Action Hotels. The independent directors of the Company, having consulted with the Company's nominated adviser, Zeus Capital Limited, consider that the terms of the Existing Loans and of the Facility are fair and reasonable insofar as its shareholders are concerned.

Alain Debare, Chief Executive Officer, Action Hotels commented:

"We remain grateful for the continued support of our main shareholder and are delighted to have secured a flexible facility for the Company at competitive rates, which enables us to continue the development of our hotel pipeline in line with our strategy."

For more information contact:

 
Action Hotels PLC                             Tel: [phone] 
Alain Debare, Chief Executive Officer 
Katie Shelton, Director of Corporate Affairs 
 
 
Zeus Capital Limited (Nomad and Broker) 
Dan Bate / Andrew Jones                  Tel: [phone] 
Victoria Ayton                           Tel: [phone] 
 
 
Camarco (Press enquiries)       Tel: [phone] 
Jennifer Renwick / Tom Huddart 
 

Notes to Editors

Action Hotels PLC

Action Hotels PLC is a leading owner, developer and asset manager of branded three and four star hotels in the Middle East and Australia. Established in 2005, Action Hotels currently has 12 completed hotels with 2,181 rooms in aggregate across the Middle East and Australia, with further properties in development in both regions.

More information is available at http://www.actionhotels.com/

This information is provided by RNS

The company news service from the London Stock Exchange

END

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July 05, 2017 02:00 ET (06:00 GMT)