Luxe Hospitality Chain Cipriani Nears Deal To Refinance Loans, Fund Future U.S. Expansion
Hedge fund King Street Capital may provide a significant cash injection for Cipriani, accelerating the Luxembourg-based Italian hotel and leisure company’s recovery.
New York-based King Street is in advanced talks to provide a $150M refinancing to U.S. subsidiaries of Cipriani, The Wall Street Journal reports.
The hospitality icon owns and operates 11 Manhattan properties, including several restaurants and members-only lounges — many of which relied on glitzy corporate events and swishy galas to keep up a steady stream of business prior to the pandemic.
Law firm Fried Frank Harris, Shriver & Jacobson had long held its lavish holiday party at Cipriani’s 42nd Street location, but it canceled it in 2020. Business started to pick up again at some locations in 2021, with events like Eric Adams’ September victory party following his nomination as the Democratic candidate for NYC mayor held at Casa Cipriani, but the omicron variant dealt the business a harsher blow.
By December last year, Cipriani’s locations at 42nd and Wall streets were facing foreclosure threats over a $53M debt, Bloomberg Law reported at the time. The locations have been in default since May 2020 and their loans were packaged into bonds before being sent to a special servicer, Trepp previously reported.
The potential refinancing deal from King Street would cover the operating debts for other properties owned by Cipriani’s U.S. subsidiary, sources told WSJ, allowing Cipriani to retire 2018 loans from Ares Capital Corp.
The refinancing could also help fund the company’s future expansion plans. Cipriani recently opened the Bellini restaurant in Manhattan, the WSJ reports, and in late May opened a 25K SF nightclub on West 50th Street in Hell’s Kitchen, which is reportedly the first mega-nightclub to open in NYC since the pandemic’s retreat.
Cipriani plans to open 20 new locations all over the world during the next three years, having spent the pandemic scouting out new locations under parent company Cipriani S.A., the WSJ reported. It includes plans for another Casa Cipriani in Milan, due to open this August, which will have reciprocity membership with the NYC establishment of the same name and includes a restaurant, spa and hotel.