Grupo Posadas Announces Action to Maximize its Financial Flexibility
MEXICO CITY, June 25, 2020 /PRNewswire/ — Grupo Posadas S.A.B. de C.V. (BMV: POSADASA) announced today that it is undertaking an action to maximize its financial flexibility in the near term, and to better manage the unprecedented challenges affecting the hospitality industry in Mexico as a result of the COVID-19 pandemic. The Company has proactively decided not to make the approximately US$15.5 million interest payment due on June 30, 2020 on its 7.875% senior notes due 2022 and it does not expect to make such payment during the subsequent 30-day cure period.
Grupo Posadas is taking this measure to ensure the continuity of its business, as a result of the significant COVID-19-related deterioration of the Company’s operating revenues and cash flows, and the uncertain impact of COVID-19 on Mexico’s tourism industry in the foreseeable future.
This decision aims to prioritize the use of cash resources for the Company’s operating activities to help maintain the high quality for which Grupo Posadas’ hotels are known and to preserve its relationships with, and its ability to honor its commitments to, clients, agencies, employees, suppliers, and other stakeholders. Importantly, this decision will enable the Company to preserve as many jobs as possible.
This decision does not impact the Company’s operations or plans to reopen its hotels, according to feasibility by region and in consultation with the Mexican Secretary of Health and relevant authorities in different States within Mexico. To date, Grupo Posadas has reopened 114 hotels and is preparing to open an additional 42 hotels in the next two weeks. As part of Grupo Posadas prioritizing the health of its guests, and to ensure guests feel safe traveling to its hotels, the Company has launched its Travel with Confidence program in partnership with a leading health organization and a world leader in health and hygiene sciences, in order to ensure reliable strategies and the strongest products for deep cleaning, sanitation, and disinfection.
Grupo Posadas is confident that, in the long term, its decision to begin the process to address its capital structure will allow the Company to maintain its position as Mexico’s leading hotel operator and support its future growth. Grupo Posadas remains committed to operating in an efficient manner and upholding the highest standards for the benefit of its guests, agencies, suppliers, financial creditors, and other stakeholders.
Grupo Posadas has hired DD3 Capital Partners, Ritch Mueller Heather y Nicolau, and Cleary Gottlieb Steen & Hamilton as its advisors to analyze and develop constructive strategic solutions that enable Grupo Posadas to best serve the interests of all of its stakeholders. The Company expects to engage with its financial creditors, including holders of its international notes, promptly after it has completed a strategic review of its operating and financial plans.
Posadas is the leading hotel operator in Mexico and owns, leases, franchises and manages 179 hotels and 28,000 rooms in the most important and visited urban and coastal destinations in Mexico. Urban hotels represent 85% of total rooms and coastal hotels represent 15%. Posadas operates the following brands: Live Aqua Beach Resort, Live Aqua Urban Resort, Live Aqua Boutique Resort, Grand Fiesta Americana, Fiesta Americana, The Explorean, Fiesta Americana Vacation Villas, Live Aqua Residence Club, Fiesta Inn, Fiesta Inn LOFT, Fiesta Inn Express, Gamma and One Hotels. Posadas has traded on the Mexican Stock Exchange since 1992.
This press release may contain forward-looking statements that are not based on historical facts and are not assurances of future results. You should not place reliance on any forward-looking statement contained in this press release. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Grupo Posadas undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or for any other reason.
Gerardo de Prevoisin, [email protected]
Liz Cohen, [email protected]
Ross Lovern, [email protected]
Marta Mejía, [email protected]
SOURCE Grupo Posadas
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