SELINA HOSPITALITY DECLARES INSOLVENCY AND PLANS ASSET SALES
Selina Hospitality, the globally recognized hotel chain catering to digital nomads, has officially declared insolvency. On Monday, the company’s board submitted a statement to the Securities and Exchange Commission (SEC) indicating that Selina no longer has reasonable prospects of avoiding insolvency, as all alternative options have been exhausted.
Founded in 2014, Selina aimed to create spaces that combine beautifully designed accommodations with coworking areas, recreation, wellness, and local experiences, primarily targeting millennial and Gen Z travelers. The company had expanded rapidly, boasting a presence in 22 countries, including major markets in Latin America, Europe, Asia, and Australia. By early 2024, Selina operated nearly 30,000 beds and had ambitious plans to manage over 400 hotels and serve more than 10 million guests by 2025.
Selina went public in December 2021 with a valuation of $1.2 billion. However, the company has since seen its value plummet. According to documents filed with the SEC, Selina failed to repay a $50 million loan to IDB Invest and missed a $455,000 interest payment on July 15. As a consequence of this default, IDB Invest may seize many of Selina’s assets in Latin America, which had been used as collateral.
In response to its financial troubles, Selina has appointed joint administrators Andrew Johnson, Samuel Ballinger, and Ali Khaki from FTI Consulting LLP to explore all possible options for the company. These options may include selling some or all of its operational subsidiaries and other group assets. However, the administrators will need to secure the necessary funding to proceed with any sales.
Selina’s announcement has significant implications for its investors. The company has stated that it will not be able to meet the Nasdaq Stock Exchange’s listing requirements, and its securities are expected to be delisted.
Despite its financial struggles, Selina’s brand has remained popular among digital nomads who appreciate its unique blend of coworking spaces and experiential programming. However, the company’s insolvency highlights the challenges faced by businesses in the hospitality sector, especially those targeting niche markets.
The future of Selina’s operational subsidiaries remains uncertain. While joint administrators have not been appointed for these subsidiaries, their day-to-day operations continue under the control of their respective directors and management teams.
As Selina navigates through this financial crisis, the outcome of its asset sales and restructuring efforts will be closely watched by industry observers and investors alike.
