New Partner for Morgans London Joint Venture
Walton Street Capital Joins MHG as Joint Venture Partner
FEBRUARY 22, 2007. Morgans Hotel Group Co. (Nasdaq: MHGC) today announced the arrival of a new partner for the joint venture that owns MHG's London hotels: Sanderson and St Martins Lane. An affiliate of Walton Street Capital, LLC ("Walton Street") has purchased the 50% joint venture interest of MHG's previous partner, Burford Hotels Limited ("Burford"). For facilitating the transaction, MHG received over USD $6 million in cash at closing based on excess working capital levels at the joint venture, and could receive additional consideration based on the value of an interest rate hedge on the existing joint venture debt in the event of a debt refinancing.
Walton Street, a Chicago-based real estate investment company with $3.4 billion under management, has purchased Burford's interest in the joint venture for the equivalent of approximately USD $52 million implying a gross value for the assets of over USD $300 million.
"We are pleased that another institutional investor of the quality and stature of Walton Street believes in the strength of our management and the quality of our brands," said Ed Scheetz, President and Chief Executive Officer of MHG.
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