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Accor Property Arm Hires Rothschild for $3.4 Billion Debt Review

One of the world’s largest hotel owners hired Rothschild & Co. to lead talks with its 19 lenders and evaluate options.

(Bloomberg)—AccorInvest Group, one of the world’s largest hotel owners, has hired advisers to help fix its balance sheet after the coronavirus pandemic disrupted the travel and leisure industry.

The company, which has more than 900 hotels under brands such as Sofitel, Mercure and Ibis, signed up Rothschild & Co. to lead talks with its 19 lenders and evaluate options including raising new capital, according to people familiar with the matter who asked not to be named because the discussions are private.

The talks, which are at an early stage, include a range of options from extending maturities to amending terms, the people said. The company has also applied for a 450 million-euro ($530 million) state-backed loan in France, one of the people added.

AccorInvest had 2.9 billion euros of bank debt at the end of 2019, of which 931 million euros is coming due next year, according to a financial report from its Luxembourg-based holding company.

The talks are part of a multi-pronged plan to ride out the virus crisis, which also includes cost cuts, a review of asset sales and talks with shareholders, the people said.

Spokespeople for AccorInvest and Rothschild declined to comment.

AccorInvest, like much of the hospitality industry, has seen its finances come under pressure from a collapse in revenues since the pandemic wreaked devastation on international travel. Many companies in the sector have been pushed into asking for respite from creditors or seeking state support. U.K. discount hotel chain Travelodge Hotels Ltd. negotiated a rent cut with landlords, while travel operator TUI AG is getting support from the German government.

Accor Group sold 58% of AccorInvest, its real estate arm, for 4.6 billion euros in 2018. Its shareholders now include Saudi Arabia’s Public Investment Fund and Singapore’s GIC Pte, institutional investors Colony NorthStar, Credit Agricole Assurances and Amundi, as well as private investors. Asking shareholders to inject new funds is among the options being considered, the people said.

© 2020 Bloomberg L.P.

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