On 9 June, International Hotel Investments p.l.c. (IHI) held its Annual General Meeting (AGM) at The Radisson Blu Resort, St Julian’s. This year, following a relaxation of COVID-19 protocol, shareholders could attend physically.
Mr Alfred Pisani, Chairman, opened the meeting by delivering a very informative address. The following are its main points.
2021 was undoubtedly another challenging year due to the COVID pandemic. Following a difficult first half of the year, IHI started seeing a gradual recovery. The second half of 2021 had been marked by a gradual relaxation of COVID-related restrictions, which, in turn, led to a general improvement in the hotel industry, with overall forecasts showing a gradual increase in bookings, translating into increased revenues month-on-month. However, in November, a further COVID variant cut short the recovery process.
Nevertheless, one could say that in 2021, the cost-saving measures achieved good results, as clearly seen in the financial statements for 2021, and that IHI is “well on the road to recovery from the global impact of the pandemic.”
Despite the difficult times, there were also a few opportunities which Mr Pisani briefly referred to. “In March 2021, we acquired the other 50% shareholding in Golden Sands at a discounted price. Also, by the end of last year, we concluded with Government an enhancement value for the residential development at Ħal Ferh. We also successfully issued an €80 million Bond, which was indeed a public certificate of confidence in the Company and its vision.”
Last year the Company surpassed the objective set by the Board to achieve a cash breakeven, thanks to the hard work and sacrifices by management and general employees.
In 2021, the Group’s operating results before depreciation reached €26.5 million as compared to an operating cash loss of €3.8 million in 2020, prior to approximately €23 million to cover interest on bonds and bank loans, giving a total cash loss of €26.8 million for 2020, whilst operations in 2021 generated sufficient cash to meet all interest on its bonds and bank loans. “We are now looking at 2022 with greater confidence and hope that we can surpass last year’s result.”
On events in Russia, Mr Pisani stated: “We are also following closely the events in Russia, where both the hotel and the Commercial Centre in St Petersburg are fully operational. IHI’s interest in St Petersburg represents approximately 8% of the Group’s total revenue and assets and these events are therefore not expected to have an overall material impact on our performance.”
On developments in Malta, he made special reference to the Corinthia Oasis [formally known as Ħal Ferħ]. In October 2021, the Group signed with the Malta Government the enhancement value for changing 9,000 sqm GFA from touristic to residential use. Moreover, also last year, the Group submitted a revised planning application to the Planning Authority for the development of an upscale resort over the site of 85,000 sqm. The project will include a 162-key 5-star resort hotel, 25 detached hotel-serviced residences and a host of ancillary resort amenities. Demolition of the old buildings has started and preparations are in hand with the completion of drawings, to go out to tender by the end of this year, with the aim to start construction by March 2023.
Concurrently with the Oasis project, there are now plannings for the refurbishment of the Corinthia Palace Hotel which has recently been awarded a positive rating from Forbes, similar to what was awarded to Corinthia London. Mr Alfred Pisani clearly set out Corinthia’s “plan to make the Corinthia Palace Hotel the best hotel of the Group and to act as a benchmark for all our other properties.”
The Chairman expanded on Corinthia’s overall vision for its properties in Malta: “We need to be conscious and in tune with the direction of how the Island intends to position itself in the tourist industry for the years ahead. With the development of the Corinthia Oasis, our Company will have 6 properties on the island, which is a clear manifestation of our belief in the tourist industry of Malta, guiding us to look at a future of upgrading all our properties. We do have an overall concept of how to regenerate our hotels, particularly the Golden Sands Resort with 338 keys to standards that justify its beautiful location. However, we will mark our time in parallel with the general upgrading of the Malta tourist product, so necessary for the future success of tourism for our island. Corinthia strongly believes that the future of Malta’s tourism is not necessarily focused solely in having higher numbers of visitors but should be more focused to raise the quality of our product and attract a higher-spending visitor for all classes of our hotels.”
Referring to Corinthia’s overseas developments, Mr Pisani added that notwithstanding the past difficult two years of 2020 and 2021, “we have nonetheless continued to move the Company forward with the development of our Corinthia Brussels which we are targeting to open in April 2024 as also our hotels in Bucharest, Rome, Doha and New York where management / lease contracts have been signed and put into effect with opening dates varying from 2023 and thereafter.”
Mr Pisani expanded on another very interesting venture: “As everyone appreciates, Corinthia has, over the many years, focused on developing a 5-star brand; in fact the name Corinthia has now become synonymous with this level of service and is widely recognized internationally. Nevertheless, in looking forward to expand our reach, we see the need to also provide hotel management services for 4-star properties, of which there are many more on the market. Consequently, the Board has instructed Management to set up a new division, offering hotel management for 4-star properties. We will agree a different brand name and, at the opportune moment, make the necessary announcements.”
Once again, the Chairman spoke of the intention to acquire a second listing. “Looking forward at our future, we had last year informed you of our future plans to go for a second listing in a liquid market, giving us the opportunity of raising new capital. This is not something that can happen overnight because a lot of preparation is needed. As a first step in this direction, we have in the past year strengthened our structures for Corporate Governance by putting additional resources on compliance and also introducing new committees to oversee our assets and future investments. I intend to continue strengthening such structures in the coming months.”
As a further step in this direction, Mr Pisani informed the shareholders that “we have entered into Heads of Terms with the United Development Company of Qatar (UDC) to subscribe to a shareholding in the Company. The agreement provides that subject to the attainment of all necessary approvals, UDC will subscribe to 100,000,000 new shares to be issued by the Company at a subscription price of €1.22 per share and furthermore, be granted an option to subscribe to an additional 200,000,000 new shares within one year at a price of €1.28 per share. “
UDC is the owner and developer of the Pearl, in Doha Qatar, a luxury residential, commercial, social and hospitality development. UDC is a listed company whose main shareholder is the Pension Fund of Qatar.
Following Chairman’s address, the shareholders voted on the resolutions as set out in the agenda.
The shareholders approved the consolidated financial statements of the Company for the year ended 31 December 2021, together with the Directors’ Report and the Auditors’ Report.
PricewaterhouseCoopers were appointed as auditors of the Company and the Directors were authorised to fix the auditors’ remuneration.
As special business, the shareholders consented to and authorised the Company to make such disclosures of information, including price-sensitive information, to such investors who are considered by the board to be bona fide offerors for the subscription of shares in the Company, under such terms and conditions as the directors may consider appropriate and to such other terms required by applicable regulation.
The shareholders then authorised the directors to issue and allot up to 300,000,000 new shares to an investor or investors, without first offering the same shares to the existing shareholders, and that accordingly the rights of shareholders otherwise set out in article 4.1 of the company’s articles of association be waived. Chairman clarified that this waiver referred solely to this particular case.
A number of clauses in IHI’s Memorandum and Articles of Association of the Company were amended, mainly to allow an increase in the number of shareholders and other matters requested by the Malta Financial Services Authority (MFSA)
The appointment of directors did not require an election since there were fewer nominations than vacancies. The Company Secretary, Mr Jean Pierre Schembri, consequently read out the names of the elected directors:
Mr Alfred Pisani
Mr Moussa Atiq Ali
Mr Hamad Buamim
Mr Joe Pisani
Mr Douraid Zaghouani
Mr Joseph Fenech
Mr Frank Xerri de Caro
Mr Abdulnaser Ahmida
Mr Richard Cachia Caruana
It is interesting for the readers to follow a few of the questions which were put forward in writing to the Company and the replies. These can be accessed here: www.corinthiagroup.com/investors/annual-general-meeting/
The video of the AGM can be accessed here: www.corinthiagroup.com/investors/annual-general-meeting/