At 31 December 2020, NH had a total of 34,052 thousand euros in economic or financial bank guarantees issued by various banks (30,371 thousand euros in 2019).
The increase in the balance of bank guarantees at 31 December 2020, compared to the balance at 31 December 2019, is mainly due to the issue of a new bond for 2,000 thousand euros and the reduction in the amount on renewal of some of them.
Of the 34,052 thousand euros in bank guarantees, 29,848 thousand euros guarantee leasing contract obligations and others related to the Group’s usual operations in various countries, and 4,203 thousand euros issued in relation to public bodies.
At 31 December 2020, the Group had taken out insurance policies to cover risks arising from damage to material goods, loss of profits and thirdparty liability. The capital insured sufficiently covers the assets and risks mentioned above.
Commitments to third parties
– On 10 March 2006, the partnership agreement of the company which owns a hotel in the United Kingdom was signed, of which a group company is a shareholder, under which, if the company were to receive a purchase offer for 100% of its shares at market price, the Group company could be required to transfer the shares. However, the group company will have preferential acquisition rights over the shares. At the close of the financial year, the group company had granted its shareholder an option to purchase shares representing up to 6.96% of the company capital of the company owning the hotel.
– Within the framework of new development projects in the normal course of business, in which NH Group subsidiaries act as lessees or operators, the Group’s parent company gives personal guarantees in favour of third parties to secure its contractual obligations, often issue promissory notes in payment of said obligations and agrees penalty clauses in case of breach of contract.
– Likewise, within the framework of the group’s financing, personal and real guarantees have been granted to fulfil the obligations guaranteed under the financing agreements (Note 18).
Claims in process
The Group’s main contingent assets and liabilities on the date these consolidated financial statements were drawn up, are set out below:
– The owner of four properties in the Netherlands has claimed in court the payment of compensation to a Dutch subsidiary because there was allegedly a change of the control situation in the year 2014, which supposedly entitles him to claim a fine, according to the lease. The claim filed by the owner, both in the first instance and on appeal, was dismissed in full. The same owner has instituted fresh court proceedings alleging a change of control situation in 2018, as the claim was dismissed in the first instance and the appeal is currently pending resolution.
– A claim has been filed against a NH Group company in Germany due to the termination of two lease agreements and claiming specific amounts, including damages.
– A claim has been filed against an NH Group company in Italy due to the early termination of a lease agreement; the ruling was favourable to the company’s interests in the appeal, although it is in judicial review currently in progress.
– An NH Group company in Italy has been sued with damages under a service provision contract requested.
– An NH Group company in South Africa has been sued for damages as a result of the termination of a lease agreement.
– A claim has been filed against two of the Group’s companies seeking payment fees to rights management from 1 January 2008 to 31 May 2013, in addition to an unspecified amount corresponding to the period thereafter until a judgement is issued, plus interest and costs. The procedure from both first instance and appeal has been resolved by setting an amount lower than the one claimed, however, a judicial review has been filed, which is pending a hearing.
– A claim has been filed against an NT Group company claiming payment in relation to the payment of a management entity’s fees for the years 2018, 2019, et seq, which is currently being processed.
– A claim has been filed against an NH Group company for damages within the framework of a corporate relationship.
– On the occasion of the agreements reached in 2014 for the sale of the shares held by NH Hotel Group, S.A in the company Sotogrande, S.A., NH Group agreed to subrogate to the position of Sotogrande, S.A. for certain claims assuming all rights and obligations relating thereto, and are summarised as follows:
-
-
-
- Plaintiff in the proceedings against construction agents for construction defects in twenty-five homes and contractual liability.
- Respondent in the process of claiming amounts from a real estate development due to construction defects.
- The company may be subject to a claim for amounts derived from an eventual administrative claim.
-
-
– A former shareholder of the NH Group has requested the annulment of certain resolutions adopted by the Board of Directors, and the proceedings are currently in progress.
– As part of the contractual liability assumed by the NH Group in the 2013 hotel purchase contract, the buyers informed the Group of the requirement to pay the Dutch Capital Transfer Tax. At 31 December 2020, the total amount of this tax, plus the corresponding default interest, was 12,300 thousand euros. The purchasers submitted an appeal to the Dutch Treasury that was rejected and an appeal has been filed with the Courts that is still pending resolution. The NH Group and the purchasers reached an agreement whereby NH assumed control of the judicial procedure.
The Directors of the Parent Company consider that the hypothetical loss incurred by the Group as a result of such actions would not significantly affect the equity of the Group.