Morgans Hotel Group Announces a Recapitalization of Its London Joint Venture
NEW YORK, Dec 05, 2008 - Morgans Hotel Group Co. (NASDAQ: MHGC) (“Morgans”) today announced a recapitalization of its London joint venture enabling it to receive approximately $12 million in cash dividends. The recapitalization required the consent of the lender and allows for future dividends from profits subject to lender consent.
The London joint venture, a 50/50 venture between Morgans and a subsidiary of Walton Street Capital, LLC, owns the 204-room St. Martins Lane hotel and the 150-room Sanderson hotel in London. The recapitalization follows Morgans recent announcement that it executed a series of extension options on $112 million worth of third-party financing from Mondrian in South Beach to 2013, subject to certain conditions.
Fred Kleisner, CEO of Morgans Hotel Group said, “The recapitalization highlights our strong and collaborative relationships with our partners and lenders and demonstrates our ability to enhance liquidity even in this difficult environment. The addition of $12 million to our corporate cash balance further improves our financial position and we look forward to continuing to execute on our strategy as we move into 2009.”
About Morgans Hotel Group
Morgans Hotel Group Co. (NASDAQ: MHGC) operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano, Shore Club and Mondrian in Miami, Mondrian in Los Angeles and Scottsdale, Clift in San Francisco, and Sanderson and St Martins Lane in London. MHG and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. MHG has other property transactions in various stages of completion, including projects in Miami Beach, Florida; SoHo, New York; Las Vegas, Nevada; Palm Springs, California; Boston, Massachusetts; and Dubai, UAE. For more information please visit http://www.morganshotelgroup.com.
Forward-Looking and Cautionary Statements
Statements contained in this press release which are not historical facts are forward-looking statements as the term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of words such as “expects,” “plans,” “estimates,” “projects,” “intends,” “believes,” “guidance,” and similar expressions that do not relate to historical matters. These forward-looking statements are subject to risks and uncertainties which can cause actual results to differ materially from those currently anticipated, due to a number of factors which include, but are not limited to, downturns in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; risks related to natural disasters, such as earthquakes and hurricanes; the completion of transactions and the integration of properties with our existing business; the seasonal nature of the hospitality business; changes in the tastes of our customers; increases in real property tax rates; increases in interest rates and operating costs; general volatility of the capital markets and our ability to access the capital markets; and changes in the competitive environment in our industry and the markets where we invest, and other risk factors discussed in Morgans Hotel Group Co.‘s Annual Report on Form 10-K and other documents filed by the Company with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of today, based upon information known to management as of the date hereof, and the Company assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.
SOURCE: Morgans Hotel Group Co.
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