- Refinancing of Icelandair Hotels completed
- Completion of the sale to Berjaya in final stages
- Expected cash flow to Icelandair Group amount to USD 84 million
On 13 July Icelandair Group signed a share purchase agreement (the “Agreement”) with a subsidiary company of Berjaya Land Berhad (“Berjaya”), whereby Berjaya acquires a 75% share in Icelandair Hotels and related hotel real estate (the “Company”). The completion of the Transaction was set for year-end 2019.
Key conditions of the Agreement have now been fulfilled, among them the refinancing of the Company, as Icelandair Hotels have today entered into an agreement with Arion Bank for borrowings amounting to ISK 8.000 million (USD 65 million). Accordingly, Berjaya has already rendered to Icelandair Group USD 15 million (approx. 30%) towards the purchase consideration of the Company. The remaining balance is due at completion, which the parties have agreed will take place on 28 February 2020. The two-month extension is due to capital controls in Malaysia. The Buyer has provided the Seller with proof of funding of the outstanding amount. Due to the extension, the Buyer has agreed to pay interest of 6% per annum until the final payment is rendered. If the final payment is not paid a break fee of USD 10 million from what has already been paid becomes effective and Icelandair Group may rescind the Agreement without recourse to the Seller or the Company.
The transaction results in the following cash flow to Icelandair Group; USD 15 million of the purchase consideration already paid by the Buyer, USD 29 million following the refinancing of Icelandair Hotels and USD 40 million on 28 February 2020 as the remaining balance of the purchase consideration.