7 Nov 2016 09:15
FOR IMMEDIATE RELEASE 7 NOVEMBER 2016
Sistema's hotel business to surpass 3,600 rooms
Moscow, 7 November 2016 - Sistema PJSFC (LSE: SSA, MOEX: AFKS) ("Sistema" or "the Corporation") announces that its subsidiary Sistema Hotel Management LLC has entered into a binding agreement to acquire 100% stakes in nine Regional Hotel Chain hotels for a consideration of RUB 2.6 billion from VIYM, a private equity fund manager operating in the CIS and Europe. Completion of the transaction is subject to a number of conditions typical of agreements of this type.
The hotel network includes nine operational properties: Courtyard by Marriott Paveletskaya (Moscow), Holiday Inn Express (Voronezh) and seven hotels operating under the Park Inn brand in the cities of Astrakhan, Izhevsk, Kazan, Novosibirsk, Sochi, Volgograd, and Yaroslavl. The properties include a total of 1,379 rooms across 87,613 square metres. The consolidated debt of the properties is RUB 4 billion. All the hotels being acquired were constructed over the last five years and do not currently require any capital expenditure. Holiday Inn Express (Voronezh), Park Inn (Volgograd), Park Inn (Novosibirsk) and Park Inn (Sochi) are opened in 2014-2015 and have significant potential to increase profitability as performance targets are achieved.
Sistema President Mikhail Shamolin said: "Against the backdrop of increased demand for domestic travel we see strong growth opportunities in the Russian hotel industry. The current economic situation allowed us to acquire fully operational, high-quality hotel assets for less than what it would cost to build comparable properties. Our assessment is that construction of hotels with the same number of rooms would take four years and cost considerably more.
"We are acquiring a group of hotels operating under international brands located in key Russian destinations for business travel, including several cities that will host the World Cup in 2018. The properties have significant potential to increase both financial results and valuations. With their addition to Sistema's portfolio we will occupy a leading position in Russia, significantly increasing the Corporation's share of the hotel market."
At present the Corporation's hospitality business includes seven hotels in Russia, Italy, the Czech Republic and Namibia with a total of 2,284 rooms. Upon conclusion of this transaction Sistema's properties will increase to 3,663 rooms.
Cushman & Wakefield acted as advisor on the transaction.
***
For further information, please visit www.sistema.ru or contact:
IR department Yury Krebs Phone: +7 (495) 730 66 00 y.krebs@sistema.ru
| Press service Sergey Kopytov Phone: +7 (495) 228 15 32 kopytov@sistema.ru
|
Sistema PJSFC is a publicly-traded diversified Russian holding company serving over 150 million customers in the sectors of telecommunications, high technology, banking, retail, timber processing, agriculture, real estate, pharmaceuticals, tourism and healthcare services. The company was founded in 1993. Its revenue in 2015 reached RUB 708.6bn; its total assets equalled RUB 1.3tn as of 31 December 2015. Sistema's global depositary receipts are listed under the symbol "SSA" on the London Stock Exchange. Sistema's ordinary shares are listed under the "AFKS" ticker on the Moscow Stock Exchange. Website: www.sistema.ru.