Corinthia returns to bond market as debt nears €800 million and liquidity tightens

One of Malta’s most reputable companies, International Hotel Investments (IHI), the owner of the Corinthia hotel brand, is carrying a heavy debt burden and operating with restricted short-term liquidity, according to the group’s latest Financial Analysis Summary, even as it seeks to raise fresh funds from investors through a new bond issue.

The analysis, published by the company, shows that while IHI controls a property empire worth almost €2 billion, its expansion strategy has left the company increasingly dependent on borrowings and refinancing.

By the end of 2025, IHI had accumulated total debt of almost €790 million, with net debt standing at €697 million. Total liabilities exceeded €1 billion, compared to shareholders’ equity of €919 million.

The group’s liquidity position also weakened during the year.

Its current ratio fell to 0.94, meaning short-term liabilities exceeded short-term assets.

Industry sources said that while the company is still turning a profit, in practical terms, it does not hold sufficient short-term assets to cover obligations falling due within the next twelve months without relying on refinancing, more loans, asset disposals or future cash generation.

The report further highlights the extent to which debt outweighs earnings.

Net debt stood at more than 11 times the company’s EBITDA in 2025, a level generally regarded as high by international lending standards (EBITDA: earnings before interest, taxes, depreciation, and amortisation).

Yet, despite these figures, IHI has just announced plans to issue €30 million in new unsecured bonds redeemable in 2036.

According to the company announcement, IHI intends to use the proceeds to refinance part of its €55 million bond issue maturing next month, with the remaining balance to be repaid through a bank loan facility.

Existing bondholders will be given preference to roll over their investment into the new issue, effectively replacing part of the maturing debt with fresh borrowing.

The refinancing exercise comes as the group continues to pursue an ambitious international expansion programme, with new Corinthia-branded projects planned or under development in Rome, Doha, Riyadh, Dubai, the Maldives and China.

According to company’s management, the current financial pressures reflect investment in future growth.

Several recently opened properties, including the Corinthia Grand Hotel Astoria in Brussels and the newly launched Rome hotel, are still in their market penetration phase and have yet to achieve their expected profitability.

However, the company’s own forecasts indicate that debt levels will remain elevated.

Net debt is projected to rise further during 2026, while total debt is expected to approach €880 million.

Industry insiders told The Shift that while IHI remains backed by a substantial portfolio of luxury hotels and real estate assets, the latest financial analysis raises questions about the group’s continued reliance on debt markets and bank financing to sustain its expansion strategy amid tightening liquidity and growing leverage.

The Shift is informed that the company is not excluding the possibility of continuing to  sell some of its existing assets, including hotels and dormant projects in Malta, as it seeks to strengthen its liquidity position.