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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.”

The firm owns or partially owns and manages a portfolio of nine luxury hotel properties in New York City, Miami, Los Angeles, San Francisco and London comprising more than 2,500 rooms. “Each of our hotels has a personality specifically tailored to reflect the local market environment and features modern, sophisticated design that includes critically acclaimed public spaces; popular “destination” bars and restaurants; and highly personalized service,” it says in the filing. “We believe that the Morgans Group brand, and each of our individual property brands are synonymous with style, innovation and service. We believe this combination of lodging and social experiences, and association with our brands, increases our occupancy levels and pricing power.” Its brands include Delano, Mondrian, Hudson, and Royalton; and restaurant and bar brands such as Asia de Cuba and Skybar.

The company added that it expects to “operate, own, acquire, redevelop and develop new hotel properties that are consistent with our portfolio in major metropolitan cities and select resort markets in the IS, Europe and elsewhere. … We believe that with the establishment of a public market for our common stock, the significant reduction of our debt through this offering, and our entry into a new revolving credit facility, we will have the financial flexibility to capitalize on our internal and external growth opportunities.” Morgans will focus on markets that attract affluent travelers and expects to grow in markets with multiple demand drivers and high barriers to entry, according to the filing. “Our success depends, to a large extent, on our ability to shape and stimulate consumer tastes and demands by producing and maintaining innovative, attractive, and exciting properties and services, as well as our ability to remain competitive in the areas of design and quality.”

Earlier this year, Morgans received $580 million in floating rate financing on its hotel assets around the country that total 1,516 keys. Those assets include the Hudson, Royalton and Morgans hotels here and the Delano in Miami Beach and the Mondrian in West Hollywood. Last year, to lower costs and extend the maturing dates up to five years, Morgans–formerly known as Ian Schrager Hotels–completed a $475-million recapitalization of all third-party corporate debt secured through the properties.

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