Saudi Arabian Family Takes 4% Stake in Dalata for £19.2m

Main Photo: The Clayton Hotel Ballsbridge, Dublin

Date: August 2020

Location: UK & Ireland

Name: Dalata Hotels

No. Keys: 9,208 – 44 hotels

Seller: TBA

Buyer: A well known Saudi business family has built up a 4 per cent stake worth more than €18 million in Dalata, the listed hotel group. The Zahid family spent more than €19.2 million buying a stake in the company in two separate tranches, through their Dubai-based Zahid Group Holding company.

When the firm bought the stake, the company’s shares were trading at just below €2.60. Since then, the shares have fallen slightly to around €2.45, valuing the total stake at €18.2 million.

Dalata’s current share price is substantially down on the price of nearly €5.90 at the end of 2019. The Zahid family’s stake-building comes just after CI Investments, a Canadian investment firm, built up a stake of more than 3 per cent, which was worth just over €14 million at the time it was acquired.

Zahid Group owns businesses in a broad range of sectors including hospitality, heavy industry, travel agency and energy, Zahid is a family-owned multi-national based in Saudi Arabia. It doesn’t have a history of acquiring stakes in UK-listed companies.

Pat McCann, Chief Executive, Dalata who last month announced that it had renegotiated its loans with it’s lenders ahead of its plans to reopen it’s 44 hotels. The hotel company’s share register has recorded a great deal of activity over the last few months.

Ennismore, a London investment fund, also told the stock market earlier this year that it had built up a 4.31 per cent stake in Dalata after its shares fell from nearly €5 to less than €2. It began to sell down that stake in May and June when the price began to climb back towards €4. In late May, it told the stock exchange it had reduced its stake in the company to below 3 per cent.

Amiral Gestion, a French investment firm, also acquired a stake in early March, before reducing it to 2.93 per cent on April 9.

Bank of Montreal, another Canadian investor, held 3.46 per cent of Dalata’s shares in April, before reducing its stake to 1.48 per cent a few weeks later.

Last month, Dalata announced that it had renegotiated its loans with its lenders ahead of its plans to reopen its 44 hotels, giving it a larger revolving credit facility and greater flexibility.

The company said it had cash resources of €103 million and available debt of €111 million that it could draw down. It also said that although it “endured significant challenges as a result of the Covid-19 pandemic”, that the “the cash utilisation during the quarter was better than initial expectations”.

At the beginning of last month, it moved to shore up its finances by securing amended debt covenants and increasing the size of its revolving credit facility to €364m. At the end of June, ahead of reopening, it had €103m in cash and undrawn committed debt facilities of €72m.

THPT Comment: So a clear path forward for this successful Irish hotel company, listed on the London market.

First Seen: Business Post Ireland

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