By Adriano Marchese
Service Properties Trust has slashed its dividend by 95% and made plans to sell over a hundred of its focused-service hotels as it looks to reduce debt and improve its liquidity.
The real estate investment trust said Wednesday that it has reduced its quarterly dividend to 1 cent a share from 20 cents a share. On an annual basis, this is a reduction to 4 cents a share from 80 cents a share.
In total, the dividend cut is expected to save the company $127 million annually.
Service Properties also plans to sell 114 of its 187 focused service hotels managed by Sonesta International Hotels next year which is expected to save the company about $725 million in capital expenditures over the next six years.
After disposing of the hotels, Service Properties expects Sonesta will continue to manage 39 full service hotels, 14 extended stay hotels and six select service hotels that it owns, while Service Properties will continue to own 34% of Sonesta.
"We expect these sales will also result in reduced capital expenditure and leverage, improve portfolio performance and better position SVC's hotel portfolio for the long term," Chief Investment Officer Todd Hargreaves said.
Write to Adriano Marchese at adriano.marchese@wsj.com
(END) Dow Jones Newswires
October 16, 2024 08:24 ET (12:24 GMT)
Copyright (c) 2024 Dow Jones & Company, Inc.
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