Investment

5 Mar 2008 09:37

Reconstruction Capital II Ltd05 March 2008 Reconstruction Capital II Limited 5 March 2008 RC2 Invests in Romanian Seaside Hotel Reconstruction Capital II Limited ("RC2") is pleased to announce its firstinvestment since the completion of its latest fundraising exercise in December2007. RC2 has acquired a 63% shareholding in Antares Hotels SRL ("the Company") for atotal consideration of EUR 8m, by means of a purchase of existing shares and bythe subscription for new shares in the Company. The Company is the owner andoperator of the 305-room Fantasy Beach Hotel (the "Hotel") located in Mamaia,Romania's premium holiday resort on the Black Sea coast and in close vicinity toConstanta. Home to Europe's fourth largest maritime port, Constanta is Romania'sthird largest city and has emerged as one of Romania's most vibrant economicregions. As part of the transaction, the funds invested in the Company willprimarily be used for the repayment of loans that were taken out for recentupgrades of the Hotel rooms and its general facilities, and to provide workingcapital to the Company. The Hotel occupies approximately half a hectare of owned land adjacent to Mamaiabeach. The Hotel's constructed area amounts to approximately 15,000 sqm. Inaddition, the Company owns a 2,257 sqm plot of land adjacent to it, also facingthe beach, which is unused at present and which RC2 intends to be developed intoholiday apartments. RC2 has appointed Peacock Hotels / Global Hotel Management, a professionallocal hotel management company with a strong track record, to run the Hotel andintends to franchise the Hotel as part of the international 'Golden TulipHotels, Inns & Resorts' chain. It is intended that the hotel will operate notonly as a summer resort hotel (as is the case at present) but also as a businesshotel for the city of Constanta with operations throughout the year. The Investment Adviser believes that the investment is attractive for a numberof reasons. Firstly, it believes the valuation at which the transaction is beingmade compares well to the real estate value of the asset being acquired.Secondly, it believes that bringing in a professional management company intandem with an international franchise, and operating the hotel all year roundas a resort and conference hotel, should substantially increase itsprofitability. For further information, please contact: Reconstruction Capital II LimitedIon FlorescuTel: +44 (0) 7767 477192 Grant Thornton Corporate Finance (Nominated Adviser)Philip SecrettTel: +44 (0) 20 7383 5100 LCF Edmond de Rothschild Securities (Broker)Hiroshi Funaki / Claire HeathfieldTel: +44 (0) 20 7845 5960 This information is provided by RNS The company news service from the London Stock Exchange