By Vanessa Cavasinni, editor Australian Hotelier

At Lantern Hotels Group’s annual general meeting, the board of directors asked securityholders to approve a ‘sell-down strategy’, in which case the ASX-listed company would begin to divest itself of all of its hotels – including core hotels.

The recommendation was passed, with 58.1 per cent of securityholders voting in favour of the motion. 41.87 per cent of securityholders voted against the motion, with 0.03 per cent abstaining from the vote.

The strategy is the latest move from the Lantern Hotels board, which recently sold the Commodore Hotel in north Sydney for $14.5 million, and has placed two of its gaming-focused hotels in western Sydney – Uncle Bucks Hotel and Ambarvale Hotel – on the market.

In the annual report, Chairman Graeme Campbell and CEO John Osborne outlined the reasons for the sell-down strategy:

“The improved operating performance and the establishment of a more stable capital structure has allowed the Board to focus on developing a strategic direction for the Group.

“The Board is of the view that the current business is sub-scale and that growth via acquisition in the current strong and tightly-held market in a value accretive manner may be difficult to achieve.

“Having considered the various strategic options, the Directors have formed the view that it would be in the best interests of the Group to obtain the flexibility of undertaking an orderly sell down of the Group’s remaining hotels (including all core hotels). Given the strong market for the Group’s properties, the Directors believe there is real opportunity to realise premium value on the Group’s property portfolio.”

In the last twelve months, sales of Lantern’s non-core hotels has strengthened the group’s financial standings, halving the company’s gross debt from $80 million on 31 December 2015, to $40 million at 30 June 2016.

Now that the sell-down strategy is approved, the board will begin selling the hotels and distributing the proceeds from the hotel sales to securityholders progressively. 

The Shout Team

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