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Group raises €272m to reduce debt
Accor Group has raised €272m through the sale of 158 properties operating under its French budget brand hotelF1.
The hotel group said the cash raised would reduce its net debt by around €187m this year, €130m of which would be added to its cash reserves.
The sale is also expected to have a "positive impact" of around €5m on the group's pre-tax profit.
"In a difficult economic environment, the transaction confirms the renewed interest of investors for hotel real estate, and particularly for the low-cost segment," Accor said in a statement.
Accor has sold the properties to a consortium of French institutional investors through a property investment trust.
But Accor will continue to operate all 158 hotels under the hotelF1 brand through a 12-year business lease signed as part of the deal.
Under the terms of the sale and leaseback agreement Accor will retain full control of pricing and the hotelF1 product.
Accor claims to have pioneered the budget hotel concept in France when it opened the first Formule 1 hotel in 1984.
The brand was renamed hotelF1 in 2007 and is Accor's entry-level brand in France with 12,300 rooms.
Accor said this year it would have paid an estimated €21.3m in rent on the 158 properties. The figure is based on 20% of its 2008 revenues.
Through franchises the HotelF1 brand operates in 12 countries around the world including the UK, Australia and Japan.