InterContinental raises $425m in hotels deal

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InterContinental Hotels Group raised $425m (£220m) from the sale of 13 properties yesterday, as it refocuses on managing hotels rather than owning them.

InterContinental Hotels Group raised $425m (£220m) from the sale of 13 properties yesterday, as it refocuses on managing hotels rather than owning them.

Hospitality Properties Trust, a real estate investment trust based in the United States that already owns several IHG properties, is paying $450m for the 13 hotels, but IHG intends to spend $25m of the purchase price on capital expenditure over the next three years. All the sites are in the Americas and include four InterContinental sites and three Crowne Plazas.

IHG has secured a 25-year management contract for all but one of the sites - in San Juan, Puerto Rico - which it will run under an operating lease. It has the option of extending the contract for up to 55 years.

The group has launched a £2.2bn asset disposal programme, which includes its 75 Holiday Inn sites in the UK. Yesterday's deal means it has sold 46 of the 136 sites it intends to offload, including all but seven of its Americas-based properties, raising £569m. It aims to hand £1bn back to shareholders. The remaining 94 properties for sale have a net book value of £1.6bn.

Richard Solomons, IHG's finance director, said: "This demonstrates our ability to continue to deliver on our stated strategy of reducing capital intensity by selling hotels at attractive prices while retaining our brand on the properties."

This week the company appointed Andrew Cosslett, a Cadbury Schweppes director, to succeed Richard North as chief executive. David Webster, the chairman, ousted Mr North because he thought a non-hotelier would be better placed to develop IHG's brands.

Bidding for the group's UK Holiday Inns portfolio will enter the second stage next week. So far it has received offers from Whitehall, the Goldman Sachs property funds, the private equity group Blackstone and Lehman Brothers.

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