Accor’s Real Estate Arm Will Not Pursue French Coronavirus Relief Package

AccorInvest, the real estate offshoot of French hotel group Accor, on Thursday said it had explored the possibility of tapping a French government-guaranteed loan programme but had decided not to pursue an aid package for now.

BFM Business had earlier reported that AccorInvest is in talks with several banks over a 400 million to 500 million euro ($435 million to $544 million) government-guaranteed loan.

AccorInvest owns and leases hotels and is only minority-owned by Accor, which operates brands like Ibis and has said it has enough liquidity to see it through the crisis even though reservations have tanked and travel has ground to a halt.

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“AccorInvest examined the possibility of tapping the state-guaranteed loan programme and has decided not to pursue this step for now,” the company said, without giving further details.

The loans, which are funnelled through commercial banks, have guarantees covering up to 90% of the amount borrowed in some cases, including Air France KLM’s bailout package, depending on the deal that is negotiated.

BFM Business had said that in return for the loan, banks would ask AccorInvest to commit to rebalancing its accounts by the end of the year via a capital increase to be subscribed notably by Accor and by U.S. real estate and investment firm Colony Capital. Accor said earlier that there was no capital increase on the cards.

The government has introduced the guaranteed loan scheme as one of several measures to help businesses affected by the coronavirus crisis.

Consumer electronics retailer Fnac Darty became the first large company to tap it in mid-April, securing a 500 million euro loan.

France has rolled out a 110-billion-euro package to prop up the economy that also includes cash handouts for the smallest firms, tax and payroll charge deferrals and state-subsidised furloughs.

(Reporting by Blandine Henault and Sarah White; Writing by Benoit Van Overstraeten; editing by John Stonestreet, Kirsten Donovan)

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