UK hostel operator Safestay exploring more property sales to boost liquidity, shares tumble

Oct 26 (Reuters) - European hostel operator Safestay on Monday warned of liquidity pressure through the winter months as year-to-date trading fell below expectations and said it was exploring additional property sales and a financing review. 

Shares of the UK-based company, which runs hostels in countries including Spain, Belgium, Greece and Italy, fell 29.4% in early trading.

Here are some details:

• Safestay said that recent revenue management initiatives and property disposals only partially offset an expected slowdown in winter

• The winter months, falling during the fourth and first quarters, are typically muted for the business, exacerbating its liquidity challenges

• The hostel operator said it is evaluating options for its working capital requirements through the winter period and 2027 and for maintaining appropriate liquidity headroom

• Investment into the refurbishment of its hostel portfolio ahead of the key summer period also remains in focus, Safestay said

• The company is additionally undertaking a broader review of both head office and operational expenditure to cut costs further

(Reporting by Simone Lobo in Bengaluru; Editing by Sonia Cheema)