(Sharecast News) - Hostel operator Safestay announced the agreed sale of the smallest of its three hostels in Barcelona, 'Barcelona Sea', a leasehold site with 96 beds, to Beds and Foods Barcelona for €0.9m (£0.78m).
The AIM-traded firm said the sale price was also the book value of the hostel on its balance sheet.
It said the annual EBITDA of the hostel, before the Covid-19 pandemic and its impact on the travel sector, was €70,000.
The sale proceeds would be used to repay the majority of the final element of the acquisition consideration due to Equity Point Holding Empresarial totalling €1.18m, for the purchase in 2018 of the Barcelona hostel located in the avenue of Passeig de Gràcia.
Safestay said that was a "much larger" hostel, offering 351 beds.
While Safestay's 17 hostels were still temporarily closed, since the timetable for exiting lockdown announced by the UK Government, it said it was able to begin planning for an orderly reopening of the portfolio in time for the summer season.
It said those plans were being made with the additional expectation that European governments would start to announce similar plans for coming out of lockdown.
"The sale of Barcelona Sea fits with our strategy of rationalisation of the portfolio as the business grows," said chairman Larry Lipman.
"It is particularly pleasing to conclude the sale during these difficult times.
"As we emerge from the Covid-19 lockdown, we shall continue to seek value added opportunities, whether through further disposals or acquisitions on the right terms."
At 0922 GMT, shares in Safestay were up 2.63% at 19.5p.
Safestay (SSTY)1 May 2024 14:25
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