Scandic needs NOK 1.6 billion
Low occupancy for several months to come means that the Scandic hotel chain has a financing need of around NOK 1.6 billion.
Corona crisis, Scandic has implemented significant cost measures. Last week, the chain’s occupancy rate was ten to fifteen percent. At the same time, it is estimated that at the end of April the company’s costs excluding rent will be reduced by just over 60 per cent.
Now the hotel chain plans to keep the occupancy at low levels in the coming months and then gradually recover during the second half of the year.
Scandic’s available liquidity currently amounts to approximately NOK 1.4 billion. With the expected low investment in the second quarter, the chain estimates an additional financing need of between NOK 1.1 and 1.6 billion in 2020, the majority of which is related to rent, taxes and fees at the end of the year.
The company expects to have a financing solution in place during the second quarter of 2020 for this scenario.
– In addition to sharply reduced costs, Scandic has also implemented measures to keep cash flow in the coming months. Investments and ongoing projects have been withdrawn, and disbursements of taxes and fees have been postponed in line with the opportunities in Scandic’s markets, the company writes in a press release.
The hotel industry has been hit hard by the Corona pandemic. Scandic has notified thousands of employees of dismissal.
In Norway, 60 out of a total of 86 hotels are closed.