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Radisson has revealed it is expecting a further cash injection from its current shareholder, Aplite Holdings AB.
The sum is expected to be a total of up to €100m (£89m) in the form of a subordinated shareholder funding.
It follows the initial cash injection of €100m (£89m) that the hotel previously received on 4 June, 2020.
The new funding is expected to cover the “cash needs” required for the group’s ongoing operations whilst the pandemic continues.
In a statement, the hotel giant said: “The additional cash injection is intended to provide further support to the group’s financial position and to assist Radisson, together with its shareholder support, in securing the planned renewal of its RCF currently in place.
“The shareholder will also work together with Radisson’s management team to improve the group’s business performance and cash flow control.”
News of the extended cash funds closely follows the group’s first quarter trading update, where it revealed that revenue decreased by 20.1% in the first three months of the year.
The group noted that the results were due to the “negative impact” of the pandemic, which also saw reported RevPAR for leased and managed hotels decrease by 20.7% in the period. At the end of the quarter, 170 Radisson sites were closed.
Federico J. González, president and CEO of the group, said: “The outbreak of COVID-19 has had a significant impact on Radisson’s performance as of the end of February 2020.
“At the end of May, more than 50% of the group’s hotels across EMEA are temporarily closed. Management has taken several measures to mitigate the financial impact, on both profit and cash flow, of the significant drop in revenue.”
He added: “These measures include, but are not limited to, furloughs, rent renegotiations and deferrals, application for governmental subsidies and loans, and postponement of non-strategic capex investments.
“The group is helped by a flexible cost model, which shows an immediate capability to reduce costs”.
