Reshuffling of Valamar Portfolio Ahead of 3Q Results

Valamar published an announcement regarding the share capital increase of Imperial Riviera.

Valamar Riviera published a document on the Zagreb Stock Exchange announcing participation in increasing the share capital of Imperial Riviera.

Imperial Riviera notes that the participants in the share capital from HRK 400.6m in the amount of HRK 426.1m to HRK 826.7m, are:

Valamar with the amount of HRK 106.07m
Allianz ZB with the amount of HRK 296.02m
ALLIANZ ZAGREB with the amount of HRK 18m
ALLIANZ INVEST with the amount of HRK 6m

Upon the implementation of the increasing share capital in accordance with regulations Valamar will hold an additional 121,483 shares of Imperial (total of 650,604 shares), with the stake of 43.68%. Meanwhile, Allianz ZB will hold an additional 339,041 shares of Imperial (total of 718,779 shares), with the stake of 48.25%.

Note that currently, Valamar Riviera holds 52.84% of the shares Imperial Riviera, which would imply that following the capital increase, their stake would decrease by 9.16 p.p. However, Valamar will continue to consolidate Imperial Riviera’s results.

Imperial notes that the share capital increase is the beginning of the realization of the five-year business plan which predicts investments in tourism in the amount of HRK 1.5bn. The investments will be directed towards the reconstruction and renewal of owned facilities and to the expansion of Imperial’s portfolio with Valamar managing operations. We assume that the majority of it will be invested in the upgrade of the Rab portfolio where there are still remaining capacities in the Economy and Midscale segment.

Further, Valamar and Imperial concluded the Purchase Agreement for Valamar Zagreb Hotel in Poreč at the price of HRK 182.15m. The company states that this winter Imperial will invest over HRK 100m to increase facility quality and reposition the hotel with Maro services intended for families. Hotel Zagreb will be renamed into Valamar Parentino.

It is also noteworthy that yesterday Valamar and Imperial concluded a long-term Agreement regarding the management of hotel-tourism facilities and amenities by which Valamar will continue to provide management services for the hotel-tourism facilities and amenities portfolio of Imperial Riviera. We assume that the mentioned contract will show improvement of revenue from services for Valamar, as additional assets are added to their portfolio under management (i.e. Hotel Zagreb).