NH Hotel Group sells Sotogrande for €225 MILLION

Madrid, October 17^th 2014 - NH Hotel Group has reached an agreement with private equity funds Cerberus and Orion Capital for the sale of 96.997% of Sotogrande S.A. for a value of €225 million, underpinning funding for the Company’s business plan. The agreement, which does not include the international assets (Sotocaribe in Mexico, Sotogrande at Cap Cana in the Dominican Republic and Donnafugata Golf Resort & SPA in Italy) and certain rights and obligations of Sotogrande linked to judicial and off court proceedings, encompasses the sale of the assets of the developer behind this prestigious resort in Cadiz, which include land zoned for development, two hotels, two golf courses and the operation of sports and tourist services. Under the terms of the agreement, the two hotels will remain under NH Hotel Group’s management for an initial period of two years.

The closing of this transaction implies proceeds from asset disposals well in excess of guidance; moreover, this transaction means that NH will have to forego less operational assets than originally contemplated in the disposal plan and thereby increase its EBITDA.

This guidance, which called for proceeds of €125 million in 2014, has been exceeded with this transaction and the already closed assets divestments –mainly NH Amsterdam Centre in June- for a value of €62 million. The Amsterdam establishment continues to be operated by NH Hotel Group as a result of a sale-and-leaseback agreement with the new owner, positioning NH to defend its leadership position in the Amsterdam hotel market where it operates 13 hotels with almost 3,000 rooms.

The cash generated will be allocated to financing shareholder value-creating investments, including the possible early repayment of part of its debt.

The Sotogrande transaction is advantageous on two fronts. Firstly, it generates an improvement on the capital invested in addition to allowing NH to focus on its core business, without having to sell key hotel properties.

“This transaction gives the Group’s business plan a strong boost as this cash inflow was not contemplated when the plan was originally formulated; the proceeds will enable us to tackle the company’s transformation from a position of even greater strength and visibility”, said Federico J. González Tejera, CEO of NH Hotel Group.

The Company’s chief executive also spoke of the strong progress being made on execution of all the initiatives contemplated in the five-year business plan, highlighting the new brand architecture, the gradual rollout of the new operational promise, the hotel repositioning effort, enhanced asset management tools and an IT and cultural transformation plan.