Safestay contemplates sales-and-leaseback deals

24th Aug 2020 10:46

(Sharecast News) - Hostel operator Safestay said on Monday that it was contemplating sales-and-leaseback deals as part of an effort to free up some cash due to continued uncertainty stemming as a result of the Covid-19 pandemic.

Safestay stated freeholds for its hostels in Glasgow, Pisa and York could be sold in either lease-back or straight disposals and said it was also contemplating early terminations for leases expected to generate losses, assuming it can strike agreements with the relevant landlords.

However, the AIM-listed group said it was confident of securing additional funding and said it was currently in the process of pursuing additional cost savings - including seeking further rent reductions.

Chairman Larry Lipman said: "This is a challenging period but I am confident that in time we will get back to normal. We are working closely on a range of options to strengthen our financial position, which may not be required but will be an additional comfort to have.

"We know we have a good cash generative business and while the current market is challenging we have a clear strategy for addressing it and as importantly for moving back to being fully operational."

As of 1045 BST, Safestay shares had slumped 11.11% to 12.0p.