News Column

Safestay To Acquire Hostel In York For GBP2.35 Million

May 21, 2014

Rowena Harris-Doughty

LONDON (Alliance News) - Safestay PLC Wednesday said it has exchanged contracts to acquire a hostel in York, for GBP2.35 million in cash.

The hostel owner and operator, which listed on London's AIM market at the beginning of the month, said it will re-brand the hostel to trade under its Safestay brand.

The hostel which operates from a freehold property, comprises of 160 beds. In 2013, it generated revenues of GBP0.6 million, from 45% occupancy. It said it expects the acquisition to be complete by the end of this week.

Safestay said it will pay for the hostel out of a combination of its own resources, and a loan of GBP1.5 million to be provided by Bredbury Ltd.

"Acquiring the Hostel as a going concern gives the benefit of an immediate revenue stream, while the building requires only minimal capex, mainly to be incurred in its re-branding as Safestay," said Chairman Larry Lipman in a statement.

Safestay shares were untraded Wednesday afternoon at 59.00 pence.

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Source: Alliance News

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