French hotel group Accor said on Wednesday that its net attributable profit rose 13 percent in 1995 to 923 million french francs ($179.5 million), helped by a drop in the charges on its debt and proceeds from the sale of a catering asset.

Its operating profit slipped to 2.92 billion francs from 2.94 billion in 1994, mainly because of the franc's strength against other currencies which reduced its 1995 turnover by 7.3 percent to 31 billion

francs.

The company, whose hotel chains include Ibis, Sofitel, Mercure, Novotel and Motel 6 in the United States, raised its dividend for 1995 by 11 percent to 20 francs.

Co-chairmen Paul Dubrule and Gerard Pelisson told a news conference the group expected an increase in both net and operating profit for 1996.

They said the group reduced its debt to 19.4 billion francs last year from 23.5 billion in 1993 and was on track to meet its objective to cut it to 17 billion francs by the end of the year.

The drop in its debt, coupled with lower interest rates, helped reduce Accor's financial expense to 1.64 billion francs in 1995 from 1.83 billion in the previous year.

The improvement helped offset the drop in turnover and a pause last year in the company's programme to sell hotels. Its results were also helped by a 1.38 billion franc gain from the sale of its Eurest stake to Compass CPG.L as part of a catering alliance with the British group.

Accor, which is trying to decrease the proportion of hotels that it directly owns while increasing the number of hotels under management, is planning asset sales this year and next of between five billion and six billion francs, Pelisson said.

To avoid taking on debt, the company said it was proposing to buy the 26 percent that it does not own in IBL, the holding company for its Motel 6 chain, through a share swap of three Accor shares for 11 in IBL. The deal would create at most 4.2 million new Accor shares.

The Motel 6 chain swung into profit last year after losing money in 1994 and is expected to show higher earnings in 1996, Pelisson said.

He reiterated that Accor would consider a bid for the Meridien hotel chain if its owner Granada GAA.L agreed to sell it. "We would look at the group if it came on the market. We envisage an acquisition without putting in any cash," he said.

The group would bring its Sofitel chain to the operation and line up institutional investors willing to put in cash, he said.

The co-chairmen said they would propose to establish supervisory and management councils at Accor by the end of the year to bring in younger managers at the top. "Paul and I are thinking of stepping back a bit," Pelisson said. ($1=5.141 French Franc)

Henri Roelings
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