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OEH > SEC Filings for OEH > Form 8-K on 15-Nov-2013All Recent SEC Filings

Show all filings for ORIENT EXPRESS HOTELS LTD



Material Impairments, Financial Statements and Exhibits

ITEM 2.06. Material Impairments

Orient-Express Hotels Ltd. (the "Company") through its subsidiary PT Bali Resort & Leisure Company Ltd. had been operating the hotel Ubud Hanging Gardens in Bali, Indonesia under a long-term lease arrangement with a third-party owner. The existing lease arrangement continues to August 2038.

The Company confirms that following an unannounced repossession of the hotel by the owner on November 11, 2013, the Company is unable to continue to operate the hotel. Accordingly, to prevent any confusion to its guests, the Company has ceased reference to the property in its sales and marketing materials for the time being, including all electronic marketing.

The Company believes that the owner's actions are unlawful and constitute a wrongful and potentially criminal repossession of the hotel and are in flagrant breach of the long-term lease. The Company is in consultation with its advisors regarding the steps it plans to take to vigorously protect its interests, as well as its clients and staff.

While the Company believes it has a strong case on the merits, if the Company is ultimately unsuccessful in recovering the property or otherwise in pursuing its remedies against the owner, a potential impairment of its assets may be necessary. Ubud Hanging Gardens had revenue of $5.8 million in the year ended December 31, 2012 and $4.5 million in the nine months ended September 30, 2013. The Company currently has on its books approximately $9.0 million of long-lived assets in relation to the property. In addition to this potential non-cash impairment charge, the Company expects to incur certain legal costs to defend its interests and other cash costs that cannot be estimated at this time.

ITEM 9.01. Financial Statements and Exhibits

(d) Exhibits

99 News release of Orient-Express Hotels Ltd. dated November 15, 2013 regarding Ubud Hanging Gardens.

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