Alua
Casablanca put $1.7 billion in negative equity up for sale in a business model of travelers unable to travel and Hyatt wanted to buy it for $2.7 billion.
Hyatt management in August 2021 strolled over to Hotel Investors I in Luxembourg and asked to borrow the money for the purchase despite the inconvenience of lending covenants that required guarantors of the loan to be compliant with US accounting standards, and the Casablanca family was not.
Hyatt management reconsidered in September 2021 and has asked shareholders for $500 million through the issue of new Class A shares or a 6% dilution on the 100 million shares outstanding with the rest borrowed, $700 million for three years and $500 million for one year.
for what?
$2.7 billion today for $3.7 billion of intangibles and goodwill less the $1.67 billion liabilities assumed or a net $2 billion for the privilege of writing down the balance sheet to the zero bound overtime.
But before the Moroccan two-step, Casablanca on 7 September 2021 agreed to pay something called Alua $31 million if Hyatt completed the purchase because Alua had played fast and loose with accounting standards.
Nested in the prospectus is a nine million dollar insurance premium in the event the moving parts don't move.
What could go wrong?
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