NH Hotel Group sells Sotogrande for €225 MILLION

17 OCTOBER 2014, MADRID, SPAIN
Summary
• The Company has sold its interest in the assets of the developer behind the exclusive Cadiz resort for a value of €225 million and is retaining the international assets Cap Cana, Sotocaribe and Donnafugata Golf Resort & SPA • With this transaction, NH has strengthened its capital structure and significantly exceeded guidance for disposal proceeds of €125 million in 2014 • The agreement allows NH to retain core and highly profitable hotels and therefore to increase the Group EBITDA • The disposals concluded throughout the year have yielded surplus proceeds -with respect to the target originally contemplated in the business plan- which the Company will allocate to funding shareholder value-creating investments, including the possible early repayment of part of its debt

Madrid, October 17th 2014 - NH Hotel Group has reached an agreement with private equity funds Cerberus and Orion Capital for the sale of 96.997% of Sotogrande S.A. for a value of €225 million, underpinning funding for the Company’s business plan. The agreement, which does not include the international assets (Sotocaribe in Mexico, Sotogrande at Cap Cana in the Dominican Republic and Donnafugata Golf Resort & SPA in Italy) and certain rights and obligations of Sotogrande linked to judicial and off court proceedings, encompasses the sale of the assets of the developer behind this prestigious resort in Cadiz, which include land zoned for development, two hotels, two golf courses and the operation of sports and tourist services. Under the terms of the agreement, the two hotels will remain under NH Hotel Group’s management for an initial period of two years.

The closing of this transaction implies proceeds from asset disposals well in excess of guidance; moreover, this transaction means that NH will have to forego less operational assets than originally contemplated in the disposal plan and thereby increase its EBITDA.

This guidance, which called for proceeds of €125 million in 2014, has been exceeded with this transaction and the already closed assets divestments –mainly NH Amsterdam Centre in June- for a value of €62 million. The Amsterdam establishment continues to be operated by NH Hotel Group as a result of a sale-and-leaseback agreement with the new owner, positioning NH to defend its leadership position in the Amsterdam hotel market where it operates 13 hotels with almost 3,000 rooms.

The cash generated will be allocated to financing shareholder value-creating investments, including the possible early repayment of part of its debt.

The Sotogrande transaction is advantageous on two fronts. Firstly, it generates an improvement on the capital invested in addition to allowing NH to focus on its core business, without having to sell key hotel properties.

“This transaction gives the Group’s business plan a strong boost as this cash inflow was not contemplated when the plan was originally formulated; the proceeds will enable us to tackle the company’s transformation from a position of even greater strength and visibility”, said Federico J. González Tejera, CEO of NH Hotel Group.

The Company’s chief executive also spoke of the strong progress being made on execution of all the initiatives contemplated in the five-year business plan, highlighting the new brand architecture, the gradual rollout of the new operational promise, the hotel repositioning effort, enhanced asset management tools and an IT and cultural transformation plan. 

Quotes
"“This transaction gives the Group’s business plan a strong boost as this cash inflow was not contemplated when the plan was originally formulated; the proceeds will enable us to tackle the company’s transformation from a position of even greater strength and visibility”, " Federico J. González Tejera, CEO of NH Hotel Group
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About NH Hotel Group

Over NH Hotel Group

NH Hotel Group is beursgenoteerd in Spanje met bijna 400 hotels in 30 landen in Europa, Afrika en Noord- en Zuid-Amerika. Onder de NH Hotel Group vallen de 3- en 4-sterren urban NH Hotels, de NH Collection flagship hotels, de nhow designhotels en de Hesperia vakantieresorts. Wereldwijd staan meer dan 20.000 medewerkers dag en nacht klaar om de beste service tegen de beste prijs te leveren voor de jaarlijks ruim 16 miljoen gasten. De hotels van NH Hotel Group zijn bekroond met de Zoover Award voor Beste Hotelketen 2014, 2015 en 2016. Kijk voor meer informatie op www.nh-hotels.com en www.nh-collection.com.

About NH Hotel Group

NH Hotel Group is listed on the IBEX 35 stock exchange of Madrid and has nearly 400 hotels in 30 countries in Europe, Africa and North- and South-America. The portfolio of the NH Hotel Group includes the 3- and 4- star urban NH Hotels, the NH Collection flagship hotels, the nhow designhotels and the Hesperia holiday resorts. Worldwide more than 20.000 employees work day and night to deliver the best service for the best price to the 16 million guests the hotel chain welcomes yearly. The hotels of NH Hotel Group have been rewarded with the Zoover Award for Best Hotel Chain of 2014, 2015 and 2016. For more information, visit www.nh-hotels.com and www.nh-collection.com.

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