Hostel company restructures £18.4m debt with HSBC

Hostel company Safestay plc has completed an £18.4 million debt restructuring and refinancing with HSBC.

Shepherd and Wedderburn acted for the provider of premium affordable tourist accommodation, which runs city centre hostels in many European cities, in the restructuring.

The Shepherd and Wedderburn team also acted for the group in completing sale and leaseback transactions on Safestay’s hostels in Edinburgh and London’s Elephant & Castle. Those transactions raised gross cash proceeds of £12.6m.

Scott Ritchie, partner in Shepherd and Wedderburn’s real estate team, said: “The combined drive and ambition of Safestay is truly impressive, and we are delighted to have assisted the group in all aspects of their recent refinancing and sale and leaseback transactions, including real estate, banking and corporate tax”.

The hostel sales were to an institutional buyer in exchange for 150 year geared ground rent leases. Safestay will continue to operate both hostels under long-term leaseholds whilst releasing the cash from the two properties.

Safestay chairman Larry Lipman added: “These deals had many ‘moving parts’ and required end-to-end legal advice and support to conclude them.

“We were both pleased and impressed by Shepherd and Wedderburn’s multi-disciplinary team, and the expertise and project management adeptness they brought to ensure that all bases were covered quickly.