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4 NEWS 20.4.2023 MATTHEW VELLA THE Russian invasion in Ukraine has led to a change in plans for the Corin- thia hotel brand's plans to expand on its Moscow project, as well as imme- diate action to repay a €40 million loan with a Russian bank. The war in Ukraine has negative- ly impacted the Corinthia Hotel and Commercial Centre in St Petersburg, in Russia, where its project in Mos- cow, in which IHI has a 10% share- holding, has also been put on hold. "IHI's interest in St Petersburg rep- resents approximately 5.6% of the Group's total revenue and 8% assets. It is pertinent to point out that due to the uncertainties brought about by the situation in Russia we took the imme- diate initiative to repay in advance and in full the €40 million loan that was on balance for the Hotel and Commercial centre in St Petersburg," Pisani said. IHI had acquired five properties on the St Petersburg's main boulevard in January 2022 by way of an amicable debt restructuring process involving the government of Austria as creditor and various Russian state bodies as counter parties. The acquisition was shortly followed by a comprehensive refurbishment and reconstruction of the three main buildings in the assemblage, resulting in a new five- star Corinthia Hotel and a prominent commercial centre offering offices and retail areas for rent. "From our angle, as owners of prop- erty, which is different to being solely operators or franchisors, our focus is that of protecting our shareholders' full ownership rights, as indeed sever- al other hospitality companies owning property in the country have done," CEO Simon Naudi said. Naudi said that IHI had acted on ad- vice to fully repay epay an outstanding loan totalling some €40 million to a Russian bank which was set to become subject to EU sanctions. "This significant and unplanned claim on our cash reserves had of course bore down heavily upon our immediate term cash flow position, which we have mitigated partly, to the tune of €24.5 million, by tapping into EU-subsidised loans intended to sup- port companies impacted by the con- flict. Meanwhile, a restructuring of our corporate set up in St Petersburg is underway. On the other hand, our ability to identify €40 million at short notice is in itself testament to the fi- nancial wellbeing of the group," Naudi said. The Maltese hotel chain Internation- al Hotel Investments, which owns the Corinthia brand, also reported a mas- sive doubling in energy costs across its entire hotel chain. Hit by the effects of pandemic lock- downs and soon after the onset of ris- ing inflation, IHI executive chairman and founder Alfred Pisani said his ho- tel group had been hit by rising cost of wages, fuels and a wide variety of goods. Energy alone, Pisani said, had grown by 93.48% year on year in costs, together with an increase in borrow- ing costs with the rise in interest rates that resulted in response to inflation. Pisani said that in the face of these challenges, Corinthia had sustained a healthy recovery with a reduction in costs, and to have staffing levels re- duced by 15% below 2019. "We have asked management to keep constant watch and active control of our energy consumption, which combined efforts have had a very positive result," Pisani said. Operating profit before depreciation and fair value adjustments EBITDA Ukraine war puts Corinthia Moscow project on hold IHI forced to repay in full Russian bank loan of €40 million due to sanctions Corinthia Moscow

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