Norgani closes Finnish acquisition

Norgani Hotels ASA has closed the previously announced transaction with Finnish Kapiteeli Plc in which Norgani purchased Kapiteeli’s 15 hotel properties and a large congress centre for an amount of EUR 306 million.

The purchase represents a considerable strategic investment in the Finnish hotel property market. Through the acquisition Norgani becomes the second largest hotel property owner in Finland, further strengthening the company’s position as the leading pan-Nordic hotel property owner with 79 properties and 13,379 rooms (+28%).

The transaction is a perfect match to Norgani’s strategy focusing on 4- and 3-star hotels, and the acquired portfolio consists of some of the most known hotels in Finland. Approximately 90 percent of the hotel rooms are located in the three largest Finnish cities Helsinki, Espoo and Tampere. The hotels have been refurbished through investments totalling EUR 90 million over the past 4-5 years.

The acquisition was financed through equity, available cash and debt provided by a bank syndicate led by SEB. Through a rights issue, which was oversubscribed by 65 %, the company raised a total of NOK 522 million by issuance of 9 million new shares at NOK 58 per share. The shares were subscribed by a broad range of current institutional investors in the US, the UK and Norway.

The sales process and the following acquisition were announced 2 and 30 June 2006, respectively.
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