Corinthia to repay millions with more borrowing

International Hotel Investments (IHI), the company behind the Corinthia hotel brand, is seeking €30 million in fresh borrowing to repay existing bondholders, as its financial reporting shows mounting debts, liquidity pressures and property disposals.

The new unsecured bonds carry annual interest of 5.45% and mature in 2034. According to IHI’s 19 October announcement, the proceeds will partly refinance €60 million of 4% bonds falling due on 20 December. The remainder will be repaid through cash flow and banking facilities.

Existing bondholders will receive priority, with subscriptions scheduled between 2 and 20 November, unless closed earlier. The exercise replaces part of the maturing debt with longer-term borrowing carrying a higher coupon.

The Shift reported in June that IHI ended 2025 with almost €790 million in total debt and €697 million in net debt. Its current ratio fell to 0.94, meaning short-term liabilities exceeded short-term assets.

The financial analysis accompanying its June prospectus showed net debt equivalent to 11.26 times annual earnings before interest, tax, depreciation and amortisation (EBITDA).

EBITDA of €61.9 million covered net finance costs of €42.1 million by 1.47 times, before accounting for capital expenditure, taxation and principal repayments. These figures illustrate the gap between the group’s substantial property holdings and earnings available to support its borrowing.

Asset disposals have accompanied its refinancing efforts.

In July, The Shift reported that Marsa Investments, a company within the wider Corinthia group, sold the former Match Factory site in Marsa to AX Group for €15 million.

The following month, The Shift reported that sources said Corinthia was seeking between €80 million and €90 million for its Ħal Ferħ property after obtaining development approval.

Corinthia acknowledged approaches from potential buyers but rejected suggestions it was eager to sell, saying it was “in no hurry nor has the appetite to dispose of this most valuable freehold property”.

IHI’s unaudited interim accounts recorded a €17 million loss during the first half of 2026. Operating cash inflows after tax reached €13.2 million, against €18 million in interest payments, before investment expenditure and lease principal payments.

Hotel trading is seasonal, limiting conclusions from six months alone. Nevertheless, operating cash generated during that period did not cover interest payments.

IHI said selling a majority stake in Corinthia Lisbon enabled €106 million in borrowing repayments. It retained a 28% interest and the management contract, while proceeds also supported a shareholder dividend.

Consolidated net debt nonetheless reached approximately €800 million in June, reflecting additional lease obligations and acquisition financing.