Accor real estate says it will not be taking out a government-backed French loan

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PARIS (Reuters) – AccorInvest, the real estate offshoot of the French hotel group Accor ACCP.PA, said Thursday it was looking into the possibility of tapping into a loan program guaranteed by the French government but decided not to pursue an aid package for the time being.

BFM Business previously reported that AccorInvest is in talks with several banks for a government guaranteed loan of 400 to 500 million euros (435 to 544 million US dollars).

AccorInvest owns and leases hotels and is only minority owned by Accor, which operates brands such as Ibis and claims that it has enough liquidity to weather the crisis even though reservations have declined and travel has stalled.

“AccorInvest has examined the possibility of making use of the state-guaranteed loan program and has decided not to pursue this step for the time being,” said the company without giving any further details.

The loans made through commercial banks have guarantees that in some cases cover up to 90% of the loan amount, including Air France KLM’s rescue package, depending on the deal negotiated.

BFM Business had announced that in return for the loan, the banks would ask AccorInvest to realign their accounts by the end of the year through a capital increase to be subscribed in particular by Accor and the US real estate and investment company Colony Capital CLNY.N. Accor previously said that there was no prospect of a capital increase.

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

Consumer electronics retailer Fnac Darty FNAC.PA opened it up in mid-April as the first large company and secured a loan of 500 million euros.

France has launched a € 110 billion economic support package that includes cash spending for the smallest businesses, tax and salary deferrals, and government-subsidized vacations.

Blandine Henault and Sarah White report; Letter from Benoit Van Overstraeten; Adaptation by John Stonestreet, Kirsten Donovan

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