International Hotel Investments announced on 5 December that following the Company Announcement issued on 16 November, it has entered into a Subscription Agreement with Corinthia Palace Hotel Co. Ltd. (CPHCL), the Corinthia parent company, and Istithmar Hotels FZE, a global hotel firm based in Dubai.
Istithmar Hotels FZE is a wholly-owned subsidiary of Istithmar. Istithmar, which means investment in Arabic, is the investment arm of the Dubai Government and is equally owned by the Corporate Office of Dubai and Dubai World. The two core areas of focus of Istithmar are private equity and real estate. So far Istithmar has made over 30 investments around the world. Further information on Istithmar is available from their corporate website.
The Subscription Agreement signed with CPHCL and Istithmar stipulates that:
a) Istithmar will subscribe to 178,000,000 new shares at €1 each, which will be allocated exclusively to the funding of a programme of acquisitions of hotel properties by IHI. This has increased by 68,000,000 shares from the 110,000,000 shares agreed to in the Memorandum of Understanding;
b) IHI will acquire from CPHCL the 100% ownership of the Corinthia Bab Africa Hotel & Commercial Centre in Tripoli and the Corinthia Towers Hotel in Prague in return for new IHI shares to be issued to CPHCL; and
c) The Directors of IHI shall endeavour to obtain a secondary listing of their Company’s shares on an international stock exchange within the next 12 months.
The allotment of the shares to Istithmar and the acquisition of the hotels from CPHCL are subject to certain statutory and regulatory approvals, which are expected to be finalised towards the end of the first quarter of 2007.
Once these transactions are completed, IHI’s share capital is expected to rise to 537 million shares of a nominal value of €1 each, with CPHCL having a 58.89% equity stake, Istithmar with 33.14% of the issued share capital and other institutional and general public shareholders with the balance of 7.97%.