Proposed Acquisition of Vaudoise Alps Hotel

 

_{Clients wished to acquire a Swiss hotel in the Vaudoise Alps. We managed to secure a bank guarantee for Euros 20 million, the funders require a Special Purpose Vehicle (SPV). SPV is a limited company into which the funds are placed, after the acquisition, the balance sheets will be merged transferring the debt to the target company, the SPV is then dissolved or held as a dormant company for future use. The bank guarantee was secured against the assets of the business by a fixed and floating debenture on the assets. The Assets are in the region of Euros 46 million.}

_{There was an objection to the business, and this was based on the assets and the accounting technique used. In Europe the Code Napoleon is used, similar to IFRS but with some small differences, the largest of which is around the valuation of the assets. Under Code Napoleon all valuations must go through the profit and loss is taxable, and this would cause a considerable cash drain and additional borrowings would be required. Under IFRS the revaluation is posted to the reserves account in the balance sheet and preserves the cash flows, yes, when the business is sold the capital gain comes into play and is taxed accordingly, or tax is held in the balance sheet as deferred tax, deferred until the asset or the company is sold.}

_{Les Diablerets is not well known outside of Switzerland, Austria, Southern Germany, French/Swiss Border areas and northern Italy, there is a great opportunity to expand the awareness to Spain, Portugal, northern Europe, the Nordic countries, and the Eastern countries. And to increase the usage of the conference centre.}

Ownership

_{The hotel is owned by a Swiss lawyer and his wife, it was treated as a lifestyle business and was not developed, they were happy with the cash profits. They are in their 80’s and wish to retire.}  

The Business

_{The hotel is ideally placed in the Vaudoise Alps, it is full in the Ski season and until recently very little occupancy in the summer months and large conference centre is not used, the well-being centre has limited use, Statistics show ladies are prepared to pay up to Euro 300 for one session of beauty treatment, massage etc. The conference has 200 seats and is used sparingly, just taking the summer months and holding a conference for one day a week will produce in the regions of Euros 3 million is sales, with an EBITDA euros 1.2 million.}

_{COVID has had a severe impact on the year ended April 2021, however, due to COVID, holidaymakers are now switching from the Southern European beaches with their large hotels and the risk of COVID due to large numbers of people on the beaches, to the mountains with smaller hotels and cleaner air please see Booking.com however, the beachgoers in southern Europe are very much reduced.}

_{The COVID effect on Eurotel Victoria is the reverse of the beach hotel, currently according to Booking.com as of 12^th July, there are only 16 rooms available between August 2021 and December 2022. the hotel has a 100% occupancy and bookings are being made into 2023. Source Booking.com and Trivago.com. The updated details show this has continued into 2023 Ski season.}

_{The hotel has the following configeruation:1.}

_{1. Letting tooms including suites 89}

_{2. Third-party rooms all suited and apartments 15}

_{3. Staff room’s 27}

_{4. Director’s suite  1}

_{From the above analysis, there are 104 rooms and suites. Due to COVID the hotel has a 90% plus occupancy and is reflected in the village of Les Diablerets, so plans have had to be altered.}

_{Wedding concept must now be delayed as there are not enough rooms available. The conference centre can only be used for daily conferences and not for corporate events which generate substantial revenues, however, the hotel is now generating strong revenue streams. When Covid reduces then the Hotel can look to other revenue streams.}

 

_{Hotel with Glacier 3000 in the background}

 

_{Arriving at Les Diablerets}

 

_{Hotel Location}

 

_{Summer Sports}

 

_{Updated Restaurant and bar}

 

_{Wellbeing Centre}

 

_{Wellbeing Centre}

 

_{Typical suite}

 

_{Conference Centre}

 

_{The Mice Centre}

 

_{The Mice Centre}

_{Can accommodate up to 200 people for MICE and other conferences, or be used for Exhibitions, currently low take-up. The current owner is not in favour of conferences.}

 

_{Conference centre Layout}

 

 

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