MONTREAL — Transat A.T. Inc. is offloading interest in one hotel chain to focus on the development of its own hotel chain in the Caribbean.
The company signed an agreement with H10 Hotels today for the sale of its minority 35% interest in Ocean Hotels, for US$150.5 million. This interest sold had a book value of Cdn$109.1 million as at April 30, 2017. The agreement with H10, which already owns the other 65% of the co-venture created in 2007, is binding and subject to certain usual conditions. The sale price is subject to adjustments at the time of the closing of the transaction by Nov. 2, 2017, and after if necessary.
“Owning a minority position in Ocean has been a valuable venture for Transat both economically and strategically, allowing us to develop an expertise and insight into the hotel business. Being a minority owner was no longer an interesting use of our capital as we embark on further investments in the sector,” said Jean-Marc Eustache, President and CEO, Transat. “We want to control our own destiny, and this transaction is the ideal springboard for building a hotel chain that reflects our style. Our hotel division will take shape in the near future, including with the hiring of a president to lead it.”
The sale of its minority interest in Ocean Hotels, as well as the proceeds from the sale of its tour operating activities in France and Greece last October, will support Transat’s creation of its own hotel development project.
In recent years, Transat has refocused its operations around three strategic areas: air transportation, hotel operation and travel distribution. Last week, the company announced the replacement of its nine Airbus A310s with 10 new Airbus A321neo LRs, starting in 2019.