Irish Aparthotel Operator Staycity Announces Conclusion Of €70m Debt And Equity Refinancing
Irish aparthotel operator Staycity Group has announced the conclusion of a €70 million debt and equity refinancing.
The company said that this refinancing will ensure that it will emerge from the COVID-19 pandemic fully capitalised and ready to continue with its plans to almost double the size of its European operations over an 18 month period and to operate 15,000 keys by 2026/2027.
The Ireland Strategic Investment Fund (ISIF) took part in the fundraising, taking a 13% stake in Staycity.
ISIF also committed to a debt financing position, and existing Staycity shareholders have agreed to invest €7 million for ordinary equity alongside ISIF.
Staycity said that, with cash and undrawn facilities of €50 million to €60 million, it is in a strong position to deal with the impact of the COVID-19 pandemic on its business over the next couple of years and to maximise opportunities that are likely to emerge in the recovery phase.
In addition to the equity raise, a new €33 million (£30 million) loan from UK bank OakNorth was used to top up Staycity's cash and repay existing debt.
"Delighted To Have Negotiated This Funding"
In a statement published on Staycity's website, Staycity CEO and co-founder Tom Walsh said, "Despite unprecedented challenges, we have achieved occupancies above 50% year to date. This is significantly ahead of traditional hotels and underpins the robustness of the aparthotel model, which is increasingly regarded as an attractive asset class.
"We are delighted to have negotiated this funding, which gives us ample liquidity to withstand current challenges and fund future expansion and investment."
"A Phenomenal Business"
Meanwhile, OakNorth Bank senior director of debt finance Deepesh Thakrar commented, "Staycity is a phenomenal business. It has been profitable both at site level and group level for 15 of the 16 years it's been operating and experienced like-for-like occupancy in 2019 of almost 90% - a clear demonstration of both the strength of the business model and the management team. It has 21 sites in its portfolio and plans to increase this by almost 50% next year with the addition of another 10 aparthotels, so the team have very exciting and ambitious longer-term plans. However, they are still being prudent in terms of projections for overall performance and occupancy rates over the next year. We look forward to continuing to support the business in the months and years ahead."
© 2020 Hospitality Ireland – your source for the latest industry news. Article by Dave Simpson. Click subscribe to sign up for the Hospitality Ireland print edition.