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ADQ invests big in Egypt’s historic hotels: Abu Dhabi wealth fund ADQ and its subsidiary Adnec Group will take part-ownership of several luxury Egyptian hotels after they signed an agreement to acquire 40.5% of Icon, the hospitality arm of Talaat Moustafa Group (TMG), through a capital increase, ADQ and ADNEC said in a joint statement on Friday, without disclosing the value of the transaction.
Who owns what: ADQ and Adnec will jointly invest in the acquisition through a special purpose vehicle. Adnec will hold 51% of the new vehicle, while ADQ will own 49%.
Background: Icon acquired a 39% stake in seven historic hotels under Egypt’s state privatization program in December, with plans to eventually hold a 51% stake in the hotels, bringing the transaction’s value to USD 800 mn. The seven hotels include the Cairo Marriott Hotel in Zamalek, Marriott Mena House, Steigenberger Hotel El Tahrir Cairo, Steigenberger Cecil Alexandria, Sofitel Legend Old Cataract Aswan, Mövenpick Aswan, and Sofitel Winter Palace Luxor. Added to Icon’s existing portfolio, Icon will have 5k rooms and 15 luxury assets nationwide.
Icon already owns some of Egypt’s most well-known properties and has four more in the pipeline. Its existing portfolio includes two Four Seasons properties in Cairo and one each in Alexandria and Sharm El Sheikh as well as the Kempinski Nile Hotel. It has additional properties in development or design in Cairo, Luxor, and Marsa Alam.
We might have an idea about the value of the new transaction: TMG last month said that an “international strategic investor” would acquire a minority stake worth USD 882.5 mn in Icon via capital increase, giving it an indirect stake in the hotels. This will result in “one of the largest foreign direct inflows into Egypt in the last several years,” TMG said at the time.
What’s the money for? Proceeds from the transaction will go towards deleveraging Icon’s existing debt and to pay for the acquisition of the historic hotels from the government, according to ADQ.
ADVISORS- EFG Hermes was sole financial advisor to TMG Holding on ADQ and Adnec’s acquisition of a stake in Icon and was sole financial advisor to TMG on its acquisition of the heritage hotels from the Government of Egypt. White & Case UAE and Egypt were legal counsel to ADQ and Adnec, while Gibson Dunn, Sarie El-Din & Partners, and Shahid Law were counsel to TMG.
