Nicosia, Cyprus. The board of directors and shareholders of MHV Mediterranean Hospitality Venture PLC unanimously approved a framework subscription and contribution agreement with Prodea Real Estate Investment Company SA. The transaction includes the issue of 58,743,000 new ordinary shares to Prodea in exchange for an in-kind contribution.
Share issue and consideration
According to a Friday announcement, MHV will issue and allot 58,743,000 additional ordinary shares of nominal value €1.00 each to Prodea, a public listed company registered under the laws of Greece.
Prodea currently holds 120,198,020 ordinary shares in MHV and will receive the new shares in consideration for a contribution in-kind to the company’s share capital.
Assets included in the contribution
The in-kind contribution includes the transfer of 75 per cent of units in Fond Five Lakes, a real estate reserved closed-end fund which owns The Bellevue Hotel Cortina in Italy.
It also includes 100 per cent of the shares in Rinascita SA, which owns the Moxy Athens City asset.
Valuation and legal process
MHV said the total value of the new shares (€58,743,000) corresponds to the median net value of the consideration shares as reflected in valuations obtained from independent experts.
The company said the experts were appointed pursuant to Section 47A of the Cyprus Companies Law, Cap. 113, to ascertain the value of the assets for the purposes of the allotment.
Capital increase and shareholder rights
MHV said no goodwill or profit or loss is expected to arise from the acquisition of the hospitality assets.
To facilitate the transaction, the board and shareholders approved an increase of authorised capital from €120,397,790.00 to €250,000,000.00, and the company’s remaining shareholders waived their pre-emption rights to subscribe to the newly issued shares.
What impact do you expect the deal to have on MHV’s shareholder structure?