Villa Dubrovnik to borrow 25 mln euro from Erste&Steiermaerkische

The loan has a usage period by September 30, 2024, maturity on September 30, 2034 and a fixed interest rate, Villa Dubrovnik said in a filing to the Zagreb bourse, without elaborating.

The deal follows a tender for the borrowing, to which the country’s top four banks were invited and three of them submitted offers.

Out of the total amount of the loan, 6.4 million euro will be used to refinance debt owed to Hrvatska Postanska Banka [ZSE:HPB] following the takeover and integration of Villa Dubrovnik's subsidiary, tourism company D Resort Sibenik, formerly known as Dogus Marina Hoteli.

The rest of the loan will be used to finance investment in the maintenance of the company's Villa Dubrovnik hotel in Dubrovnik.

In preparation to finance investment in Villa Dubrovnik, the company decided in August to increase its share capital by issuing new shares worth some 4.0 million euro. Besides the investment in the Villa Dubrovnik hotel, the company announced on February 22 a plan to develop smaller luxury accommodation capacities, it added.

Several pension funds run by local pension fund management company Erste Asset Management own more than 98.5% of the equity capital of Villa Dubrovnik, Zagreb bourse data showed.

Villa Dubrovnik shares last traded on November 11, when they soared 113.18%, closing at 55 euro.

($ = 0.932 euro)