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Orient-Express Hotels (OEH) Provides Update On Strategic Actions

 December 14, 2012 12:04 PM

(By Balaseshan) Orient-Express Hotels Ltd. (NYSE: OEH) has provided update on strategic actions that will drive value, strengthen its balance sheet, and further enhance unparalleled portfolio of luxury properties.

The company has announced plans to commence significant renovations at two of its top-performing properties. During 2013, the company plans to commence significant enhancement programs at two of its Grand Hotel Europe, St. Petersburg and Charleston Place, South Carolina properties.

The company is arranging a new $50.0 million loan agreement for the renovation of Grand Hotel Europe, which will provide $26.0 million for the renovation project, $5.2 million for the repayment of debt and costs, and the remaining $18.8 million for general corporate purposes.

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In the first phase, which will be carried out over four months during Charleston Place hotel's low season, the company will renovate 145 keys. This phase is expected to be partially funded by $9.2 million of additional borrowings on the hotel's existing loan facility.

The company has closed the sale of The Westcliff, Johannesburg. The purchaser, a joint venture partnership between a Dubai-based private investment company Albwardy Investment and Hotels Properties Ltd. based in Singapore, will retain Orient-Express as the manager of the hotel for a period of up to 12 months from closing while the new owner develops its long-term refurbishment plans.

Orient-Express has executed a definitive agreement to sell Porto Cupecoy, a real estate development in Sint Maarten, to a local buyer. Orient-Express has retained ownership of four condominium units that were not part of the purchase agreement but are under contract. The principal transaction is expected to close within the next 30 days.

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The combined price of both the sale transactions is $45.0 million in cash, with net proceeds of $41.1 million available to the company for general corporate purposes. The proceeds from the pending sale of the four condominium units at Porto Cupecoy are expected to contribute an additional $3.9 million to this total.

Orient-Express has completed the final phase of an approximate $20.0 million comprehensive refurbishment program at the main building of Copacabana Palace, a landmark property on Copacabana beach in Rio de Janeiro.

With a first phase in 2011, this program included the refurbishment of all 145 rooms and suites in the main building and significant enhancements to the lobby and public areas. This iconic hotel is now fully operational and strong growth in 2013 is anticipated.

OEH is trading up 1.72% at $11.85 on Friday. The stock has been trading between $6.31 and $13.13 for the past 52 weeks.



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