Morgans Group Plans $300M IPO

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NEW YORK CITY-Morgans Hotel Group Co. expects to raise as much as $300 million in an offering of its common stock. The locally based firm has not listed pricing or the number of shares in its IPO filing, but intends to use proceeds to pay down debt and for corporate expenses. In the first six months of this year, Morgans posted a net loss of $22.6 million. Morgans had approximately $660 million of outstanding indebtedness, including $79.8 million of capitalized lease obligations.

Morgans intends to contribute net proceeds from this offering to Morgans Group LLC in exchange for an unnamed percentage of managing membership interest. Morgans Group LLC is the operating company through which the firm will own hotel properties. In the SEC filing, the company identifies itself as a fully integrated hospitality company that operates, owns, acquires and redevelops boutique hotels in gateway cities and select resort markets in the US and Europe. “We are widely credited with establishing and defining the rapidly expanding boutique hotel sector. Over our 21-year history, we have gained experience operating in a variety of market conditions.”