Enjoy’s extraordinary shareholders meeting that took place on January 28 ended up with a positive vote to merge the company’s operations with Dreams, a significant step to combine the operations that would result in a company in which Enjoy would have a 36% stake.
In addition to approving the merger, the shareholders also agreed on how the process will be carried out, although no major details have been shared yet.
Before the vote, Enjoy’s Finance Director Esteban Rigo-Righi said that the next step will be to request authorization from the National Economic Prosecutor’s Office (FNE), something that he hoped to “proceed with immediately after the approval of the board.”
Additionally, in a report to the Commission for the Financial Market (CMF), Dreams GM Jaime Wilhelm Giovine assured that the company’s shareholders agreed to incorporate Enjoy’s businesses, subject to conditions precedent and including a capital reduction of $27.5m.
The new company will have 29 licenses and 19 hotels spread across Chile, Argentina, Colombia, Panama, Peru, and Uruguay.
After the announcement that they intended to merge their operations, the credit rating agency Fitch Ratings referred to the proposal and described it as “potentially positive” for Enjoy’s credit profile.
“The merger should result in an entity with a stronger capital structure than Enjoy’s, as well as greater scale and geographic diversification,” said Fitch Ratings.
Moreover, the agency stressed that the “historically higher margins of Dreams’ operations would improve the new company’s overall profitability, and synergies could be obtained in the supply chain and other areas.”
However, Fitch said that it will need “greater insight into the new company’s corporate governance and financial management, as well as regulatory approval for the transaction before taking a rating action.”