Bankia analysts on Tuesday commented for Consenso del Mercado the break up of the alliance between the Spanish hotel chain NH and the Chinese HNA. The stock market in Madrid received the news very negatively and share prices dropped by 17%.
“In the face of volatility and uncertainty in the financial situation nowadays, the HNA group decided to cancel its deal with NH Hoteles. The terms of the capital increase were the following: the issuance of 61.7 million of shares (25% above the current number of shares) at an issuance price of €5.35/share (€2/nominal share) without the pre-emptive subscription right.
Among all the aspects relative to the alliance, the capital increase was of the greatest importance because it strengthened the company’s balance sheet and would have allowed it to enter the refinancing process of the 2012 maturities with banks in better conditions (up to €601mn). After the break up of the agreement, NH Hoteles will receive $15mn as compensation.”