Morgans Announces Recapitalization of Its London JV
Receives $12 million cash dividend
DECEMBER 8, 2008. Morgans Hotel Group Co. (NASDAQ: MHGC) announced a recapitalization of its London joint venture enabling it to receive approximately $12 million in cash dividends. The recapitalization required the consent of the lender and allows for future dividends from profits subject to lender consent.
The London joint venture, a 50/50 venture between Morgans and a subsidiary of Walton Street Capital, LLC, owns the 204-room St. Martins Lane hotel and the 150-room Sanderson hotel in London. The recapitalization follows Morgans recent announcement that it executed a series of extension options on $112 million worth of third-party financing from Mondrian in South Beach to 2013, subject to certain conditions.
Fred Kleisner, CEO of Morgans Hotel Group said, 'The recapitalization highlights our strong and collaborative relationships with our partners and lenders and demonstrates our ability to enhance liquidity even in this difficult environment. The addition of $12 million to our corporate cash balance further improves our financial position and we look forward to continuing to execute on our strategy as we move into 2009.'
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