- Ashford Inc. (NYSE:AINC) agrees to provide $50M to Ashford Hospitality Trust (AHT) in connection with the acquisition by AHT of additional hotels through a new enhanced return funding program--or ERFP.
- AINC will provide 10% of the price of each hotel acquired by AHT, helping AHT to grow its assets by as much as $500M.
- The ERFP has the potential to be raised to $100M based upon mutual agreement.
- In the program's first purchase, AINC will commit $11.1M to AHT for the expected $111M acquisition of the Hilton Alexandria Old Town. This investment is expected to add about 70 cents to AINC's year one adjusted net income per share.
- AINC will aim to fund the program with about 50% cash on hand and 50% debt.
- For AINC, the program is expected to produce year one cash-on-cash returns of about 50% and five-year IRR estimated at over 35%.
- AINC anticipates funding the program with existing cash on its balance sheet, its existing credit facility, and with ongoing cash flow.
- Source: Press Release
- Source: Press Release