InterContinental Hotels secures new funding as March revPAR slumps
InterContinental Hotels Group said it had secured new financing arrangements taking its total available liquidity to $2bn as it forecast a 55% fall in room revenues for March due to the Covid-19 pandemic.
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The company said it expected a for a first quarter fall in revenue per available room of 25% - in line with guidance given last month.
“Trading in Greater China continues to steadily improve, with only 12 out of 470 hotels now closed. In the US, 10% of our hotels are currently closed, demonstrating the resilience of our mainstream, franchised business, and, in EMEAA, 50% of hotels are currently closed. Occupancy levels in comparable open hotels are currently in the low to mid 20% range across the business,” IHG said on Monday.
IHG said it had amended its syndicated revolving credit facility to include a waiver of existing covenants until the end of the year, introducing a minimum liquidity covenant of $400m, tested at half year and full year and had also issued £600m in commercial paper under the Bank of England-backed Covid-19 Corporate Financing Facility (CCFF).
The company added it now had access to $1.35bn of cash on deposit and undrawn existing bank facilities of $660m.
Hargreaves Lansdown equity analyst Emilie Stevens said that while the news that most of the groups hotels were open, it was more telling whether they were "full or empty’, and at the moment hotels are far closer to empty, with occupancy rates at around 20%".
"These measures are good news for now but whether they’re enough depends on two bigger questions - how long lockdowns last and how long after that until hotels are full again.”