Safestay PLC Completion of Disposal (7083D)
July 01 2021 - 1:00AM
UK Regulatory
TIDMSSTY
RNS Number : 7083D
Safestay PLC
01 July 2021
1 July 2021
Safestay plc
("Safestay", the "Company" or the "Group")
Completion of the Sale of Edinburgh Hostel
Safestay (AIM: SSTY), the owner and operator of an international
brand of contemporary hostels, is pleased to announce that on 30
June 2021 the Group completed on the sale of its Edinburgh Hostel
to a&o Hotels and Hostels for a cash consideration of GBP16
million, representing a 22% premium to the GBP13.4 million book
value. The 2019 annual EBITDA of the hostel pre-COVID 19 was GBP1.7
million.
The Group has responded to the pandemic and associated lockdowns
across Europe by reducing the monthly cash burn of the business to
GBP0.35 million through lockdown, which has significantly mitigated
the impact of having to close the hostels. However, despite those
measures, following the prolonged extension of the lockdowns, the
Board took the decision to provide the Company with greater balance
sheet security and flexibility by securing additional capital in
approving this attractive GBP16 million offer for the Edinburgh
hostel.
The Board believes this sale was the best option to protect
shareholders' interests and place the Company in a strong position
for when the market recovers, being able to take of advantage of
new opportunities that are expected to arise.
Part of the proceeds of the disposal will be used to reduce debt
by 35% whilst providing the Group with sufficient cash reserves as
the business moves back out of lockdown towards positive cash
generation over the coming months.
Larry Lipman, Chairman of Safestay, said:
"This transaction has facilitated a 35% reduction in Group
borrowings as well as providing us with the cash to reset our
hostels and re-engage as restrictions lift. It is a very positive
solution both for the restart, which is underway, but also to have
the option to invest at a time when many of our competitors will
not."
Enquiries:
Safestay plc Tel: +44 (0) 20 8815 1600
Larry Lipman
Liberum (Nomad & Joint Broker) Tel: +44 (0) 20 3100 2000
Andrew Godber / Edward Thomas / Miquela Bezuidenhoudt
Novella Tel: +44 (0) 20 3151 7008
Tim Robertson / Fergus Young
For more information visit our:
Website: www.safestay.comhttp
Vox Markets page:
https://www.voxmarkets.co.uk/company/SSTY/news/
Instagram page: www.instagram.com/safestayhostels/
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END
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