Egypt, (July 25, 2000) - HVS International - Orascom Hotels Holding (OHH), Egypt's largest private hotel company, plans to fund ongoing hotel construction by raising US$ 57.5 million in a bond and share issue later this year.
Last March, OHH aborted the idea of raising capital by issuing global depository receipts in London, as a result of poor market conditions. Shares are expected to be issued at around US$ 2.40 per share, raising around US$ 28.7 million. The bonds are expected to raise the remainder of the capital and will be non-convertible, seven-year maturity bonds with an interest rate of 14.25%.
OHH's share price has fallen by 27% since May, closing at US$ 1.88 on Wednesday. According to the company's Chairman, Samih Sawiris, there is a lack of interest in the Egyptian stock market from foreign investors, which has resulted in the low price for the shares. Nevertheless, Sawiris commented how tourism is one of the few areas unaffected by the economic slowdown, and envisages a net profit for the second quarter of between US$ 144 million and US$ 172 million.
OHH currently owns and manages eight luxury hotels, with plans to open four more including the 650-bedroom Club Med Middle East, due to open by November 2002. OHH has managerial alliances with other hotel companies including Sheraton, Hyatt, Bass and Movenpick. Last month, the parent company of OHH, Orascom for the Project and Development, entered a joint venture with the Abu Jaber Group to build a US$ 300 million tourist resort on the coast of the Red Sea in Jordan.
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This release is courtesy of HVS International, a global full-service hospitality consulting company. HVS International numerous services including market studies & valuations, development consulting, litigation support, asset management,and more. Investment advisory services are available in the UK, Africa, Europe and the Middle East.
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