PPHE Hotel : Refinancing of London and Dutch Hotels

16 June 2016

PPHE Hotel Group Limited

Refinancing of London and Dutch hotels

PPHE Hotel Group Limited (the Company), which together with its subsidiaries (the Group) owns, leases, develops, operates and franchises full service upscale and lifestyle hotels in major gateway cities and regional centres, predominantly in Europe, is pleased to announce that it has entered into an agreement to refinance its interests in two of its London hotels (Park Plaza Sherlock Holmes and Park Plaza Riverbank) (the London Hotels) and all six of its Dutch hotels (art'otel amsterdam, Park Plaza Victoria Amsterdam, Park Plaza Vondelpark, Amsterdam, Park Plaza Amsterdam Airport, Park Plaza Eindhoven, and Park Plaza Utrecht) (the Dutch Hotels).

Aareal Bank AG (Aareal) will be providing two separate facilities, one for the London Hotels and the other for the Dutch Hotels which will be standalone facilities and which will refinance an existing single facility also provided by Aareal in December 2013.

The facility for the London Hotels is for £150 million, a term of 10 years and will bear a fixed interest rate of 3.248% per annum.

The facility for the Dutch Hotels is for €182 million (£144.3 million), a term of 10 years and will bear a fixed interest rate of 2.165% per annum.

Following this refinancing and the successful refinancing of Park Plaza Victoria London and Park Plaza Westminster Bridge London in April and May this year respectively, the Group has extended the weighted average term to maturity of its debt facilities from 2.7 years to 9.3 years.

The facility for the London Hotels will be secured by, inter alia, mortgages over the Group's ownership interests in the London Hotels and security over the shares in the various companies that own such interests in the London Hotels. The Dutch Hotels will be secured by a similar security package over the Group's ownership interests in the Dutch Hotels and security over the shares in the various companies that own such ownership interests. The Dutch Hotels and shares in the relevant entities will not stand as security for, and the entities that own interests in the Dutch Hotels will not guarantee, the facility for the London Hotels and vice versa.

As part of the process of putting the new facilities in place an independent valuation of the Group's interests in the hotels was obtained that valued such interests in the London Hotels at £254 million and the Dutch Hotels at €279.2 million (£221.1 million) with such valuations reflecting the impact of certain refurbishments that the Group is intending to undertake at some of the hotels as part of its rolling programme of works on a large number of the Group's hotels and the Group has agreed with Aareal to implement some of the works by the second anniversary of the facilities. The combined book value of the London Hotels and the Dutch Hotels as at 31 December 2015 was £342.9 million and the estimated book value after the refurbishment is £380 million.

The new facilities will be used among others to repay £100.8 million and €141.9 (£112.5 million) which together represent the entire amount outstanding of the 2013 Aareal facility and for general corporate purposes.

The new facilities are subject to certain conditions precedent being fulfilled, and funding is expected to take place on Friday 17 June 2016.

Boris Ivesha, President & Chief Executive Officer of the Company, commented:

'This refinancing is part of our ongoing programme to refinance assets within the Group with longer term facilities which enable us to continue to invest in refurbishment works at these hotels, as we remain focused on growing our market share and delivering customer service.'

Enquiries:

Notes to editors

PPHE Hotel Group Limited is a Guernsey registered company and through its subsidiaries, jointly controlled entities and associates, owns, leases, operates, franchises and develops full service upscale and lifestyle hotels in major gateway cities and regional centres, predominantly in Europe.

The majority of the Group's hotels operate under two distinct brands, Park PlazaHotels & Resorts and art'otel. The Group has an exclusive licence from Carlson, a global privately held hospitality and travel company, to develop and operate Park PlazaHotels & Resorts in Europe, the Middle East and Africa. The art'otelbrand is fully owned by the Group.

The Group also owns a controlling interest in the Arenaturist group, one of Croatia's leading hospitality companies.

The portfolio of owned, leased, managed and franchised hotels comprises 38 hotels in operation offering a total of more than 8,300 rooms. The development pipeline includes five new hotel projects and one hotel extension and reconfiguration. These developments are expected to add nearly 1,100 rooms to our portfolio by the end of 2016 and an additional 500 rooms by the end of 2019.

Our Company:
www.pphe.com

Our Hotel Brands:
www.parkplaza.com
www.artotels.com
www.arenaturist.com

For images and logos visit www.vfmii.com/parkplaza

Forward-looking statements

This announcement may contain certain 'forward-looking statements' which reflect the Company's and/or the Directors' current views with respect to financial performance, business strategy and future plans, both with respect to the Group and the sectors and industries in which the Group operates. Statements which include the words 'expects', 'intends', 'plans', 'believes', 'projects', 'anticipates', 'will', 'targets', 'aims', 'may', 'would', 'could', 'continue' and similar statements are of a future or forward-looking nature. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the Group's actual results to differ materially from those indicated in these statements. Any forward-looking statements in this announcement reflect the Group's current views with respect to future events and are subject to risks, uncertainties and assumptions relating to the Group's operations, results of operations and growth strategy. These forward-looking statements speak only as of the date of this announcement. Subject to any legal or regulatory obligations, the Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the Group or individuals acting on behalf of the Group are expressly qualified in their entirety by this paragraph. Nothing in this announcement should be considered as a profit forecast.

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