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Ireland's Dalata to raise capital to fuel UK hotel growth
[DUBLIN] Ireland's largest hotel operator Dalata Hotel Group on Tuesday launched a share placement to raise capital to take advantage of opportunities arising from Covid-19 disruption, particularly in the United Kingdom.
The placed shares will represent up to 19.9 per cent of current issued share capital, Dalata said, and help secure leases at competitive terms in London, regional parts of Britain and Dublin where "growth opportunities remain compelling".
The placing will also help mitigate any possible prolonged Covid-19 impact, it added. Dalata, which operates the Maldron and Clayton Hotel brands, had 110 million euros (S$178.83 million) in cash and 111 million in undrawn committed debt facilities at the end of August.
"It is not for liquidity, it is to take advantage of opportunities we see beginning to arise," Dalata CEO Pat McCann told Reuters in a telephone interview.
Dalata, which owns or leases 12 of its 44 hotels in the United Kingdom, said it operated at 30 per cent occupancy across the group in July upon reopening from the Covid-19 lockdown and projected that to have risen to 40 per cent in August, boosted by guests holidaying on their home soil.
It reported a 70.9 million euro first-half loss on Tuesday, mainly because of property revaluations and impairments on other assets significantly impacted by the pandemic.
The outlook for the near term is uncertain due to short lead times on bookings and uncertainty on international travel.
Mr McCann said Dalata was looking at new ways to shore up demand, including offering students deals to stay in their hotels when they may only need to be in university one week a month due to Covid-19 restrictions.
"Normally at this time of the year, I would know the outcome for 2020 with a fair level of accuracy but at the moment I have no idea," Mr McCann said. "The patterns that we would normally rely on no longer exist."