Delek Group Ltd. (TASE: DLEKG) sub-subsidiary Delek Belron International Ltd. (TASE:DLKI.B1) and Electra Real Estate Ltd. (TASE:ELCRE) have completed the acquisition of 39 Marriott hotels in the UK. Delek Belron will indirectly own 17% of the properties, and Electra Real Estate will indirectly own 9.9%.
The 39 hotels, including five in London, have 8,456 room altogether. The hotels include hotels for business, tourism, and golf. Marriott International Inc. (NYSE:MAR) will manage the hotels for 30 years, with an option to extend for ten years. Under the management contract, if Marriott does not meet benchmarks set by the parties, the buyers have the right to terminate Marriott’s contract to manage the hotels.
The acquiring companies have secured a long-term non-recourse fixed-interest loan of ₤856.1 million (NIS 7 billion). The financing bank has also agreed to finance up to ₤62.2 million for additional investments in the hotels in the coming years.
An external expert estimated the average annual net income from the hotels at ₤78 million.
Published by Globes [online], Israel business news - www.globes.co.il - on April 1, 2007
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