Action Hotels offloads Dubai development site

(Sharecast News) - Owner, developer, and asset manager of branded three and four-star hotels in the Middle East and Australia, Action Hotels, has entered into a conditional sale-and-purchase agreement with Apex Investments to dispose of its 100% interest in the 5,553.5 square metre plot of investment land located at the Innovation Hub within Dubai's Media City, it announced on Tuesday.The AIM-traded firm had announced on 28 September in its interim results that there was a downward fair value adjustment of the plot of land of $3.8m, following the start of an exercise to explore the sale of the investment land with a view to providing working capital to the group.It said the acquirer agreed to pay an aggregate consideration of AED 38.5m ($10.5m), slightly below the net asset value of AED 39.9m.The sale-and-purchase agreement remained conditional on receiving no objection certificates, amongst other conditions, and the long stop date for satisfaction or, where applicable, waiver of the conditions was 1 January 2019.Action Hotels purchased the plot of land for $10.07m in February 2016.The impact to Action Hotels, in addition to the downward fair value adjustment already captured in the interim results, were fees payable in relation to the sale and loss on sale of asset totaling AED 2.2m."This conditional sale and purchase agreement will provide additional working capital to the group to continue its development plans and pipeline of hotels in the Middle East," said Action Hotels chief financial officer and interim chief executive officer Andrew Lindley."The board of Action Hotels assessed holding the investment land against the long-term cash requirements of the group and decided to exit the investment."