Transmetro Corporation could revive merger negotiations once market stabilises, COO says
Rayann BekdacheSeptember 3rd, 2009
Transmetro Corporation, the ASX-listed Australian operator of hotels and pubs, could re-visit a merger and would consider approaches from advisors once the economy stabilises, COO George Bedwani said.
The company had AUD 15.6m (USD 13m) in revenue for the half-year ended 31 December 2008. Some 12 to 18 months ago, it was in merger negotiations with an ASX-listed company operating outside the hotel industry. Negotiations ceased because of the economic climate. He declined to provide further details.
Transmetro would be "happy to re-open negotiations" with that company or with other interested parties when the economic climate improves, Bedwani said, possibly in the next 12 months. Advisors were brought in by the bidder company, and Transmetro still has relations with them, he said.
The purpose of a merger would be to raise capital to further grow the business in Australia and assist with expansion in New Zealand. While the company is not for sale, Chairman and Managing director John McEvoy, who owns around 85.5% of the company, could also consider selling down his shares if necessary, Bedwani said.
Transmetro is cutting costs by outsourcing housekeeping in its hotels and managing debt with cashflow, which is helped by its five pub operations, Bedwani said.
Metro Hospitality Group, the trading division of Transmetro, administers the Metro Hotels chain, which owns, manages and leases around 12 hotels and four pubs in Australia. In July 2009, the company signed an agreement to operate its first hotel in Auckland.
Transmetro Corporation employs around 1,200 staff in Australia, including outsourcing staff. It has a market capitalisation of AUD 9.3m (USD 7.8m).