Orascom Development sells $ 4m in Oberoi hotel
(CA: Orascom) has sold its 51 per cent stake in Oberoi Zahra Floating Hotel, which consists of 27 cabins to one investor with a total investment of $ 4 million.
The company said the sale would result in cash flows of $ 2 million. The company also aims to use the proceeds from the sale to finance the company’s expansion.
The sale comes as part of the company’s strategy to sell a number of non-core assets to strengthen its financial position, restructure its investments, prioritize and invest capital in building cities.
Earlier, Ebtikar Investment Finance revealed the completion of the acquisition of Orascom Development Egypt’s entire stake in Tamweel, which represents 87% of the company’s total value of EGP 360 million.
Orascom Development Holding said the cash proceeds from the sale would be directed towards the company’s previously announced loan reduction strategy, which would also be followed by a reduction in premiums due in 2019 and a strengthening of the company’s financial position.
Orascom Development Egypt signed an agreement to schedule loans of 3.8 billion pounds to play its role to strengthen the financial position.
The agreement includes the payment of 325 million pounds out of a total of 650 million pounds, with the balance to be repaid by the end of June.
The company agreed with the lending banks to reduce the interest rate on foreign currency loans by 100 basis points, pointing out that this leads to an average reduction of the cost of borrowing the company from 10.5% to 9.3%.
The agreement provides interest payments of 70 million pounds for 2019, providing a total of 320 million pounds during the six years from 2019 to 2024.
The agreement includes rescheduling of the remaining original installments to better match the company’s cash flow without changing the repayment schedule as 50% of total loans will be repaid in recent years.
The company posted a net profit of LE 111.3 million in the first quarter of this year, up 34% compared to the same period of 2018, after realizing revenues of LE 837.6 million compared to LE 654.9 million in the same period. Net real estate sales increased by 282.8% to LE 1.5 billion during the quarter The first of 2019 compared to 397.6 million pounds in the same period.