PLAYA Hotels and Resorts, which operates four all-inclusive resorts in Jamaica, is slowly emerging from its liquidity challenges, having secured additional financing of US$224 million.

The additional financing was achieved by raising US$204 million of additional debt financing and the sale of US$20 million of its ordinary shares at US$4.10 per share in a private transaction. Also, Playa has entered into the Fourth Amendment to Amended & Restated Credit Agreement with its senior secured credit facility lenders.

Playa’s liquidity situation was so severe that the company, which has hotels in Jamaica, the Dominican Republic and Mexico, was forced to sell two of its Jamaican hotels, Jewel Dunn’s River Beach Resort and Spa and the Jewel Runaway Bay Beach Resort and Waterpark. The sale cost was said to be US$60 million in cash with the successful purchaser.

The sale of the hotels comes less than two years after Playa acquired properties in St Ann from Sagicor Group Jamaica. However, Playa has raised the US$204 million of additional debt financing from affiliates of Davidson Kempner Capital Management LP, consisting of a US$94-million credit facility maturing in April of 2024 with an effective interest rate of 9.25 per cent, and a US$110-million property loan agreement secured through its Jamaican hotels of Hyatt Ziva, Hilton Rose Hall and the Zilara Cap Cana in the Dominican Republic.

That loan agreement matures in July of 2025, with an effective interest rate of 9.25 per cent, which is expected to be funded in June 2020 upon satisfaction of customary conditions precedent. Playa has also sold US$20 million of its ordinary shares to affiliates of Davidson Kempner Capital Management LP at a price of US$4.10 per share in a private transaction that was exempt from registration under the Securities Act of 1933.

Commenting on the capital raised, Bruce Wardinski, chairman and chief executive officer of Playa, asserts that “with this additional financing significantly improving Playa’s liquidity profile, and only US$85 million in debt maturing in 2022, we look forward to delivering excellent ‘Service from the Heart’ and taking market share in the new travel landscape”. He boasted that Playa’s “ability to access the capital markets is a reflection of the ongoing investor support and our commitment to driving superior returns”.

Sagicor Group Jamaica, which holds a 15 per cent stake in Playa, welcomed the announcement that Playa, owners, and operators of the Hyatt Ziva and Zilaria hotels, as well as the Jewel Paradise Cove and Hilton Rose Hall resorts in Jamaica, have raised much needed financing totalling US$224 million.

Chris Zacca, president and chief executive officer of Sagicor Group Jamaica, and chairman of Sagicor Real Estate X Fund Ltd remarked that “this major improvement in Playa’s liquidity profile is certainly great news, and validates Sagicor Jamaica’s confidence that Playa will emerge successfully from the effects of the shutdown of tourism as the sector gradually reopens regionally”.

He declared that Sagicor looks forward to Playa delivering excellent ‘Service from the Heart’ and taking market share in the new travel landscape. Playa, a developer of all-inclusive resorts in Mexico and the Caribbean, owns and/or manages a total portfolio of 23 resorts (8,690 rooms) located in Mexico, Jamaica, and the Dominican Republic.