Monte Carlo Grand Hotel is First Acquisition for New Joint Venture.
Fairmont Hotels & Resorts Inc., Kingdom Hotels International (Kingdom) and Bank of Scotland Corporate, a division of HBOS plc announced today that they have formed a joint venture to invest in luxury hotels in key European markets.
The joint venture will have a potential buying capacity of pnds stlg 800 million (US$1.5 billion) and will be equity funded 50% by Bank of Scotland, 25% by Fairmont and 25% by Kingdom. The partners anticipate making equity contributions of up to pnds stlg 200 million (US$390 million).
The hotels acquired by the joint venture will be managed by Fairmont and Bank of Scotland will provide debt financing for the joint venture. Cedar Capital Partners will serve as managers and investment advisors for the joint venture.
The joint venture's first investment is the purchase of the Monte Carlo Grand hotel in Monaco, a 619-room landmark property on one of the most coveted stretches of the Côte d'Azur. The purchase of the hotel by the joint venture has been completed and the property will be flagged "The Fairmont Monte Carlo" in March 2005. The new owners expect to invest US$50 million in refurbishment.
"We are delighted to extend our relationship with Kingdom and Bank of Scotland through this joint venture," said William R. Fatt, CEO Fairmont Hotels & Resorts. "Coming on the heels of our agreement to manage London's Savoy Hotel on completion of sale, this agreement marks another important milestone in the global expansion of the Fairmont brand and adds Monte Carlo
to our list of world renowned Fairmont hotel destinations."
"As a long-term investor in Fairmont and Fairmont hotel properties, we believe our joint venture's focus on European luxury hotel acquisitions is an excellent strategic choice for growth," said HRH Prince Alwaleed bin Talal bin AbdulAziz Alsaud, Chairman of Kingdom.
Peter Cummings, Managing Director Bank of Scotland Corporate added, "We are very confident in the expertise and capacity of our joint venture partners to command a strong presence in Europe and develop the properties acquired to the very highest standards of quality and financial performance."