Safestay acquires York hostel

21st May 2014 13:54

AIM-listed contemporary hostel developer Safestay has exchanged contracts to buy York hostel for 2.35m pounds in cash.The property, which is located in Micklegate, compromises 160 beds and will be re-branded to trade as Safestay. The acquisition is expected to be completed by May 23rd.The hostel has been independently valued by Edward Symons at £2.6m. Last year the group reported an unaudited a turnover of £0.6m. The consideration payable will be satisfied from a combination of the company's own cash resources and a loan of £1.5m to be provided by Bredbury at an interest rate of 0.75%. Chairman Larry Lipman said: "We are delighted to be able to announce this acquisition of a hostel in York so soon after the admission to trading on AIM of Safestay on May 2nd 2014. "Furthermore, 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." As of 14:13 the share price was unchanged at 58p.WS