Hostel operator Safestay has received an early stage offer for the business.
Safestay has now begun a strategic review, led by PwC, to examine its options.
Last year Safestay made an operating loss of £7.4m as Covid closed its hostels for most of the year. Revenue was slashed by 74% to just £4.8m. Its adjusted EBITDA was a loss of £2m, down from a £6m profit in 2019.
Since then the company has completed the sale of its hostel in Edinburgh to A&O Hotels and Hostels for £16m, reducing its debt by 35% and injecting £6.3m in cash into the business.
Chair Larry Lipman said: “Individual and group bookings are coming in for the winter and for 2022 and underpin our confidence of returning to pre-Covid levels of trading. We believe strongly in the appeal of the Safestay brand.
“However, we recognise that this is a natural point, as we relaunch the business post-Covid, to undertake a strategic review, in order to maximise value for all shareholders. This process will reveal whether there is additional value for shareholders compared to the upside we believe we can deliver.”
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