Le Vendome secures
debt reschedule scheme
The value of loans
is around $100 million
Bankmed and Bank Audi have agreed to refinance the debts of La Société des Grands Hotels du Liban (SGHL), owners of the Hotel Phoenicia and Le Vendome, after negotiations to restructure the debt. Bankmed is the main lender.
The banks agreed on the rescheduling of debt payments based on a payment-in-kind security against Le Vendome hotel. As the Central Bank (BDL) is facilitating debt relief schemes to businesses, its Banking Control Commission participated in the negotiations and approved the agreed valuation.
In an exclusive interview with BusinessNews by Lebanon Opportunities, Mazen Salha, Chairman of SGHL, said: “The concluded deal reschedules the debt for two years and ensures a relief from the loan’s overbearing interest.”
Salha said: “The loan is in the $90-$100 million range.” He said that their relation with the banks started 17 years ago. During those years, SGHL was repaying part of the debt, then borrowing again.
According to Salha, the payment-in-kind will facilitate the reduction of about 70 percent of the total debt.
SGHL has the right to redeem the property after two years, as local law provides a two-year right of first refusal for the former owners to re-acquire their property in priority to any other person or entity. Salha said: “If SGHL isn’t able to pay back the debt in two years, the banks will close on their ownership of the hotel.” At that time, the value of the loan with its interest will approximately be equal to the value of the hotel.
SGHL and the Salha family will continue to manage Le Vendome in partnership with the InterContinental Hotels Group.
Date Posted: Jul 14, 2016