Frumkvöðlar ehf.

Restructuring Proposal

The 5 Million Star Hotel

What we built

Iceland's original transparent bubble hotel.
Guests sleep under the Northern Lights.

50,000+ guests, bootstrapped, no investors
18 bubble units across 2 locations
155M revenue, 28M profit (2024)
Top 10% worldwide on TripAdvisor
New York Post Top 16 most unique hotels in the world
US TV game shows for 6–7 years, 4–5M viewers per episode
The Problem

Two problems at once.

COVID
COVID hit.
Tour revenue crashed.
Tour revenue 262M → 41M. No cash for marketing. Occupancy dropped, prices dropped, CPI-indexed debt kept growing — 29M/yr in interest. A snowball we couldn't stop.
Scale
Too few units for
non-tour operation
When tours disappeared, the bubble hotel had to stand on its own. 18 units can't carry the full cost structure — every hotel operator knows you need 30–40 to be self-sustaining. We were building toward that when COVID hit.
The Solution

Refinance, clean the slate
and back to sustainable growth.

Refinance
One loan
replaces five
→
Clean up
Settle all
obligations
→
Scale
18 → 30+
units
→
Result
Self-sustaining
operation
The Numbers

Cash flows that cover the loan.

128
2024
155
2025
155
2026E
260
2027E
400
2028E

Revenue in M ISK. Growth from 18 → 27 units + Bjarnargil. 187M tax shield for 5+ years.

202620272028
Revenue155M260M400M
EBITDA39M82M134M
Debt Service27M27M52M
DSCR1.43×3.02×2.57×
Above 1.0× from day one
Interest-only 2026–2027, principal from 2028
Security

Real assets backing the loan.

Property collateral plus a hotel operation that would cost
600–700M ISK to replicate. Effective LTV: ~50–60%.

Bjarnargil Farm
~85M ISK
Working farm in North Iceland, close to Deplar Hotel. Hanging bubble expansion site. Tenant in place (260K/mo rent).
Frostaskjól 11
~130M ISK
Residential property, rental income from 4 units. Self-sustaining mortgage coverage.
The 5 Million Star Hotel
18 units
100% shares in Kyrrðin ehf. 155M revenue, 28M profit, 10-year track record. A traditional 18-room hotel costs 600–700M ISK to build — our low-capex model delivers the same revenue.
The Ask

310M ISK
mezzanine facility.

Interest-only first 2 years. Principal from 2028. Secured by property + operating company shares.

Clean the balance sheet
~243M ISK
Refinance all bank loans
Pay off COVID loan + overdraft
Clear vehicle loans
Resolve RSK, pension funds, suppliers
Stop the bleeding — clean slate
Growth
~66M ISK
Fix 4 offline bubbles (~5M)
New expansion sites (~35M)
Working capital (~15M)
Bjarnargil + maintenance (~10M)
Each bubble: 9-month payback
Next Step

Then bring in
an equity partner.

Once restructured, we plan to sell 25–30% equity in the operating company. A clean balance sheet makes this straightforward.

Stronger balance sheet
Fresh equity behind the debt
New capital strengthens the company. Accelerates growth and debt paydown.
Why after
Clean books attract investors
No investor touches this structure today. After restructuring — a simple profitable hotel. Fundable.
The plan
Sell 25–30% equity
Growth capital to scale faster. Reduces leverage. Company gets stronger every year.
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