Following the announcement issued on 12 March 2020, International Hotel Investments plc provided a further update on its operations on 28 March 2020 whilst also reassuring stakeholders on its debt obligations and the Group’s strength and stability. In this respect, IHI noted its swift response in reducing all operating costs to the minimum required to secure and preserve the condition of its various properties which, at best, are partially operating with significantly reduced business. This also includes measures at curtailing payroll which remains the single, largest operating cost of the company.
IHI further added that its main focus at this stage is to preserve its financial resources. Furthermore, it is expected that the company will benefit from varying schemes adopted by the various governments of the countries in which it has a presence (including Malta and the UK), including outright salary subsidies as well as the waiver or deferral of payroll taxes and social security contributions and waiver of property taxes for 2020.
IHI noted that it has also been in touch with its funding banks in Malta and internationally. To varying degrees, all banks have agreed or are in advanced discussions with IHI to defer payment of capital and, in some cases, also interest. The company also organised separate lines of credit with related parties in case of any cashflow shortfalls.
On the basis of the various measures taken to date, and based on a scenario of little to no income being generated for the next six months up to and including September 2020, IHI explained that it has sufficient resources and funds to maintain all its payment obligations, not least salaries, but also bond interest payments as they arise through the course of the year.
Notwithstanding the severe restrictions on travel, IHI noted that is has kept working on the design of its new Corinthia hotels under development located in Rome, Doha, Bucharest, Moscow and Brussels, the latter two being developments in which IHI is also an equity investor.