Business • December 14 2003

Corinthia subsidiary IHI targets the future

By Kurt Sansone
International Hotel Investments shareholders this week boarded the train to the future by overwhelmingly adopting resolutions proposed by the board of directors to authorise a change in the company’s reporting currency to euro and increasing the authorised share capital more than threefold at the Malta Stock Exchange-listed company’s extraordinary general meeting.
Company chairman and CEO, Alfred Pisani, was a happy man at the end of the proceedings and told The Malta Financial and Business Times that the Board’s intention was to attract institutional investors of international reputation.
"We are going from strength to strength and we aim to take opportunities as they arise. As always we will seek to invest in the best interest of the company and its shareholders. The Board has already approached and will be approaching institutional investors," Mr Pisani told this newspaper.
Earlier, shareholders heard Mr Pisani say that the change of currency would eliminate the exchange risk for international investors, who may be attracted to invest in the company.
Mr Pisani also reiterated the board’s intention to eventually list IHI on an international stock exchange where it was more possible to access capital.
Answering to concerns raised by small shareholders throughout the general meeting, Mr Pisani said that the Board’s objective was to accelerate the time when shareholders would see a return on their investment. He said that the company’s strategy for the near future included investing in hotels that are already up and running to provide cash flow. In this way the company would be able to pay shareholders a dividend.
Until now IHI has invested in four five star hotels that had to be pulled down and built from scratch or renovated. These property investments have left shareholders with no dividend returns but have contributed to an increase in the company’s capital assets. The Lisbon hotel is expected to be inaugurated in May next year in time for the Euro Championships to be held in Portugal in June.
At the meeting shareholders had to approve four resolutions proposed by the board of directors. All resolutions were approved overwhelmingly.
The first resolution proposed the conversion of both the company’s issued share capital and the company’s authorised share capital into euro. The reasoning behind the conversion was to eliminate the exchange risk linked to the Maltese Lira making it more attractive for international investors. The conversion also makes life easier for the company, which has over 85 per cent of its activity transacted in euros.
The second resolution asked shareholders to approve an increase in the company’s authorised share capital to EUR 750 million from the previous EUR 243.3 million. The increase gives the company the chance to widen and diversify its shareholding base with the aim of growing bigger to be able to eventually list on a foreign stock exchange. The increase in the authorised share capital could also dilute the majority shareholding Corinthia Palace Hotels Co. Ltd has in IHI.
The third resolution asked shareholders to give the board of directors the faculty of issuing shares of up to the value of EUR 150 million to investors who are not presently shareholders of the company. Given that present shareholders would not be given the opportunity to participate in this share offering, the board of directors asked for the additional powers to be applicable for a limited 12 month period.
The fourth resolution asked shareholders to approve the appointment of the board chairman from among the directors instead of him being appointed by the majority shareholder, which until this week was Corinthia Palace Hotel Co. Ltd.
kurt@newsworksltd.com