Wed 10/07/2020 13:23 PM
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Relevant Documents:
AccorInvest Group Results
AccorInvest (Non-Consolidated) 2019 Report

Hotel investor, owner and operator AccorInvest has opened mandat ad hoc proceedings and is being advised by Rothschild for upcoming debt restructuring negotiations, according to reports by Bloomberg and Les EchosContinue reading for the EMEA Core Credit team's coverage of  AccorInvest, and request a trial to access our coverage of thousands of other debt restructuring situations.

The company has appointed Frédéric Abitbol et Marc Sénéchal as mandataires for negotiations in a potential debt restructuring, according to Les Echos. Rothschild will lead talks with about 20 lenders and evaluate options, including the raising of new capital. Its shareholder Accor told Reorg in an emailed statement that AccorInvest is working on adding incremental liquidity. The company is seeking a €450 million French state-backed loan, according to news reports.

AccorInvest, previously known as HotelInvest, was spun out of Accor in 2017. In 2018, Accor sold 57.8% of the capital for €4.6 billion to sovereign wealth funds Public Investment Fund and GIC, institutional investors Colony NorthStar, Crédit Agricole Assurances and Amundi, and other private investors. In 2019, another 5.2% was sold to shareholders leaving Accor with a 30% stake in the business, the lockup level in which it is committed until May 2023.

Accor said that it is fully supportive of AccorInvest’s financial strategy to add incremental liquidity. The group added it has been supportive of AccorInvest in the form of fee deferrals as the Covid-19 crisis has hit the hospitality industry very hard.

The company was affected by the Covid-19 pandemic after Accor closed up to 62% of its hotels network earlier in the year.

AccorInvest has implemented strong measures to protect its financial situation, including cost-cutting measures and streamlined organization, as well as cash and liquidity management, according to the statement.

AccorInvest has 30,000 employees in 25 countries worldwide, and owns 846 hotels out of the 1,182 assets owned and leased by Accor. Of these, 348 are wholly owned by AccorInvest and 498 operated under fixed and variable-rent leases. In 2019, revenue amounted to respectively €3.9 billion while EBITDA was €857 million, including a €282 million from IFRS 16 application.

As per the 2019 annual report, AccorInvest had €2.9 billion of bank debt, of which €931 million of bank borrowings is due in 2021 and €2 billion due in 2023. Availability under the €3.6 billion credit facility was €677 million. Net debt before adjustments was €5.4 billion, including €2.6 billion of lease liabilities.

The acquisition of Accor’s 86% stake in the Polish hotel group Orbis, post year-end but pre-Covid-19, for €1.06 billion is likely to have increased the group’s debt.

The €3.6 billion facility was signed with about 20 international banks in May 2018 and was structured as follows:

  • €2 billion term loan with interest of 2.3% due Jan. 31 2023;

  • €1.35 billion capex facility with interest of 2%, due Jan. 31, 2021; and

  • €250 million RCF with interest of 1.7% due Jan. 31, 2023.

The bank repayment schedule as of Dec. 31 2019 was as follows:

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