6.2% / 6.8% INT. HOTEL INVESTMENTS PLC 2013

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International Hotel Investments plc - Prospectus 24th January 2003

The Company

IHI was incorporated in March 2000 by the Corinthia Group to invest in a balanced portfolio of mixed-use developments with hotel properties being their main component. In December 2010, IHI purchased the Corinthia brand from its parent company Corinthia Palace Hotel Company Ltd (CPHCL) for €19.6 million. The agreement also provided that until 2020, any addition to the portfolio of Corinthia branded rooms will result in an additional payment of €6,400 per room to CPHCL.

Hotel Properties:

The IHI Group has a stock of 2,935 rooms across the following 8 properties:

  • Corinthia Hotel Budapest, Hungary (100%);
  • Corinthia Hotel St Petersburg, Russia (100%);
  • Corinthia Hotel Lisbon, Portugal (100%);
  • Corinthia Hotel San Gorg, St Julians, Malta (100%);
  • Corinthia Hotel Prague, Czech Republic (100%);
  • Corinthia Hotel Tripoli, Libya (100%);
  • Hotel Marina, St Julians, Malta (100%);
  • Corinthia Hotel & Residences, London, UK (50%) – The remaining 50% is held by Libyan Foreign Investment Company (LFICO). The Metropole Building was converted into a 294-room five-star Corinthia Hotel which commenced operations in April 2011. Meanwhile, conversion works on the adjacent building (known as 10 Whitehall Place) comprising 12 luxury apartments were recently completed and the Group is now expected to conclude the sale of all twelve apartments in the coming months.

Other Operating Assets:

  • CHI Ltd (100%) – This fully-owned subsidiary currently manages the eight hotel properties listed above as well as another five hotels owned by the Corinthia Group and other third party hotel owners. One of CHI’s objectives is to improve the average room rates of the properties it manages. In this respect, the management arm of the Group has invested heavily in its own global distribution system to enable it to replace the lower yielding indirect bookings (mainly through tour operators). In 2011, the contribution of this new system to overall revenue amounted to 9% and CHI is expecting this to increase to 18% and 25% in 2012 and 2013 respectively. Moreover, CHI is seeking to rapidly increase the management of third-party owned hotels and the presence of the Corinthia Brand in a major destination such as London should help increase awareness among hotel property owners.
  • Quality Project Management Ltd (20%): In April 2000, IHI acquired a 20% shareholding in the construction project management company of the Corinthia Group. This company specialises in construction and the provision of project management services both in Malta and overseas.

Future Developments:

  • Medina Tower, Libya: (25%) – IHI owns 25% of Medina Tower Joint Stock Company which is entrusted with the development of the 40-storey high rise Medina Tower on 11,000 square metres of land in Tripoli, Libya. The development, which should be completed in 2016, will comprise a mix of residential apartments as well as office and retail space. Mediterranean Investments Holding plc (MIH), 50% owned by the Corinthia Group, owns another 25% of this project while the remaining 50% shareholding is held by the Economic Development and Real Estate Investment Company (EDREICO) of Libya.
  • Benghazi, Libya: (75%) – In October 2008, IHI and LFICO set up a joint-venture with the purpose of acquiring the derelict building formerly known as the El-Jazeera Hotel and an adjoining site in Benghazi. Subsequently, the two sites will be redeveloped into a 330 room 5-star hotel, 30 luxury apartments (which will be placed for sale) and 4,400 square metres of office and retail space. IHI plans to reduce its current shareholding of 75% to 55% prior to the commencement of the project.

Use of Proceeds

The net proceeds from the bond issue have been used by the Company to fund the re-development and refurbishment of the Corinthia Alfa Hotel in Lisbon, Portugal which the Company acquired in 2001 for a total acquisition cost of €47 million. The refurbishment project was estimated to cost €25 million, funded through banking facilities from Eurohyp Bank for €12.5 million on a 20 year basis and the balance through two bond issues. The refurbishment project includes the completion of the high-rise building’s top five floors, which had never been completed by the previous owners, therefore increasing the hotel’s number of rooms from 430 to 531. The project also included the refurbishment of the property’s remaining hotel rooms, public areas and conference facilities.

Security & Status

Unsecured & Unsubordinated

Coupon

6.2% up to 15 February 2010 and 6.8% thereafter

Amount Issued

€8,058,000

ISIN Code

MT0000111238

Maturity

The Bonds will be redeemed at 100% (par) on 15 February 2013.

Interest Payment

Annually on 15 February

XD Date

1 February

Listing

Official List

No. of Bondholders

696

List Directors

Alfred Pisani, Joseph Fenech, Simon Naudi, Frank Xerri de Caro, Michael Beckett, Nagmeddin Hemali Mokhtar, Andrew John Watson, Hamza Ali Abdullatif Mustafa, Joseph J. Vella.

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