Marriott Corp., beset by lingering weakness in the real estate and lodging industries, said it expects to receive $220 million in cash within the next two months as it completes the sale of a number of hotels and restaurants.
Through three separate agreements that were approved by Marriott's board last week, the Bethesda-based company plans to sell 14 new Courtyard by Marriott hotels, 110 family restaurants in California and certain time-share mortgages held by the its resorts division.
Proceeds from the sales would be used to reduce bank debt, the company said.
The sales of assets comes as part of a widespread restructuring started two years ago and aimed at cutting costs, slowing expansion and paring debt.
Marriott, which has $3.6 billion in long-term debt, has been combating softness in the real estate and lodging industries that has hurt its long-standing practice of selling properties after their construction and then leasing them back long-term and managing them under contract.
Dorothy K. Lee, a senior analyst at Moody's Investors Service who downgraded Marriott debt two weeks ago, said that the agreements had been expected as part of the company's efforts to make its debt "more manageable" and strengthen the company's "financial flexibility."
"At one point a year ago, they found themselves in a more precarious position," Ms. Lee said. But after the recent restructuring, "they are a very strong company that is still burdened by a slowdown in the lodging industry," she said.
While revenues increased 11 percent in the third quarter, compared with a year earlier -- thanks mostly to the addition of 70 hotels -- Marriott earnings fell by one-third as business slowed at its hotels and airport and highway concessions.
As part of the restructuring, Marriott has cut 1,500 administrative positions and curtailed construction plans. The company sold its Roy Rogers fast-food chain in April 1990 for $365 million in cash, plus the assumption of debt, and has sold 108 other restaurants and four hotels this year for another $67 million.
Yesterday's announcement said that an institutional investor group, which the company declined to identify, agreed to buy the hotels, including the Courtyard Hotel at Baltimore-Washington International Airport, for about $140 million in cash. Marriott would continue to run the properties under long-term leases, it said.
The company is selling its California properties, primarily consisting of Bob's Big Boy restaurants, to the Restaurant Enterprises Group Inc. for an undisclosed amount.