Thailand’s Minor Hotels – MINT Sells Two Hotels in the Algarve for €148 million

Main Photo: The beach at the Tivoli Vilamoura

Date: July 2021

Names: The Tivoli Marina Vilamoura and the Tivoli Carvoeiro

Location: Vilamoura, The Algarve, Portugal

Number of Keys: 383 and 248

Seller: Minor Hotels, the Thai group bought 14 Tivoli brand hotels in Portugal in 2016 from the bankrupt Espírito Santo Group (GES) for €294 million. Now, it has sold two of the hotels in the Algarve for €148 million, with capital gains of €26 million.

Buyer: Minor Hotels concluded the sale of two hotels in the Algarve – the Tivoli Marina Vilamoura and the Tivoli Carvoeiro – to the Azora European Hotel & Lodging, FCR, owned by Spain’s Azora Gestión.

The two hotel units will continue to be managed by Minor, through the NH Hotel Group (NHH), for 20 years, which may be extended for another 10, according to a statement this Wednesday, July 21.

Dillip Rajakarier, Mint CEO, notes that “the transaction reiterates the combined strength of Mint and NHH in executing another strategic asset rotation with a respected institutional real estate investor in Europe following the sale-and-lease-back of NH Collection Barcelona Gran Hotel Calderón last month”.

“We are pleased to fulfill yet another of our commitments to our shareholders, to strengthen our balance sheet with this milestone at such a challenging time. The transaction further increases the overall return of the Tivoli portfolio, in addition to the previous transaction, completed in 2019”, he adds, quoted in a statement.

The manager alludes to the sale of three of the hotels to the US fund Invesco which it had purchased – Tivoli Avenida da Liberdade, Tivoli Oriente and Avani Avenida da Liberdade (former Tivoli Jardim) – for €313 million, in a “sale & manage back” operation that generated a capital gain of €62 million.

Concha Osácar, one of Azora’s founding partners, expresses the “serious conviction that there will be a deep post-pandemic recovery in the European hotel and leisure sector, which had a significant repressed demand after long periods of blockades and restrictions, especially in the sun and beach markets”.

“As we emerge into a post-COVID world, we’ve built a strong pipeline of new investment opportunities and are holding conversations with the owners and operators of some of the best hotels in Europe, such as the two Tivoli Hotels we’ve acquired today. This acquisition represents a rare opportunity to acquire two well-run, prestigious hotels at an attractive price, which we believe will allow us to create long-term value for our customers,” he concludes.

The acquisition of Tivoli went through several phases. The hotel chain was controlled by Rioforte and ran into financial difficulties as early as 2014, following the resolution of Banco Espírito Santo (BES) and the collapse of GES. At that time, Rioforte started a process to sell the hotels, which should have been completed by the end of 2014.

But the company from the Espírito Santo universe that managed the companies in the non-financial sector went into insolvency, leading to an impasse that prevented the entry of a new investor. With Rioforte bankrupt, the hotel chain also ended up entering a Special Revitalization Process (PER), in which there were 822 creditors.

Minor, which had already been in negotiations with Rioforte in the first sale attempt, returned to the scene in January 2015, with the purchase of six hotels of the Portuguese brand, for €168 million. In June of that same year, Espírito Santo Hotels, through which Rioforte controlled the Tivolis, failed to reach an agreement with creditors and declared insolvency. In February 2016, Minor purchased the missing Tivolis. The final bill was €294.2 million, for the brand’s 14 hotels.

During Minor International’s ownership of the two hotels, Tivoli Carvoeiro underwent a major facelift which bumped it up to a five-star status and included the opening of a new restaurant and a rooftop Sky Bar.

Price: €148m

Price per Key: €234k

THPT Comment: Once again some skillful manoeuvring by Minor to balance the books in this post-Covid era, keeping the long-term management agreements. Excellent!

First Seen: Jornal de negocios Portugal

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