EVENT to hit divestment target once $75m Rydges North Sydney sale completes

EVENT to hit divestment target once $75m Rydges North Sydney sale completes

Rydges North Sydney (photo courtesy of Facebook).

Entertainment and leisure services provider EVENT Hospitality & Entertainment (ASX: EVT) has today announced the proposed sale of its Rydges North Sydney hotel to Singaporean-backed investors for $75 million.

The deal for the 17-storey hotel, located at 54 McLaren Street, North Sydney, is due to be completed on 24 July following the agreement between EVENT and two Australian-based affiliates of Singapore-based High Street Holdings.

The sale of Rydges North Sydney means EVT has achieved its divestment goal of raising $250 million through the sale of non-core assets over the past 18 months, with this latest transaction the result of EVENT having identified that the building required capital refurbishment if it was to be retained by the group.

During 1H22, the group also sold Rydges Bankstown, Canberra Civic (commercial office), Newcastle Cinema (cinema operations ceased in 2020) and the management rights and related property relating to QT Falls Creek.

Following the completion of the Rydges North Sydney sale, the total value of disposals will reach $275.3 million, representing a premium of approximately 28 per cent over the most recent valuations of the properties sold.

The proceeds will reduce debt in the short term and provide additional funding capacity for growth projects, with the remaining property portfolio of the group independently valued at just over $1.9 billion.

EVENT had previously identified an opportunity to attract a premium from the sale of the property as a residential development; however, after undertaking a thorough market analysis determined its best use remained as an operating hotel asset.

The group continues to pursue Rydges Rotorua's sale, subject to a market process and achievement of an acceptable price, and further potential non-core property divestments remain under review.

The Sydney-headquartered business owns brands such as Event Cinemas, Greater Union and Birch Carroll & Coyle Cinemas, Moonlight Cinemas, Rydges Hotels & Resorts, QT Hotels & Resorts, Atura Hotels, Thredbo Alpine Resort, Edge Digital Technology and Sydney's majestic State Theatre.

In February, the group reported profits after tax of $33.3 million for the first half, up 155.4 per cent from a loss of $60.2 million during the corresponding period in 2021.

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