Meeduma

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Hotel Project in Kandy Sri Lanka

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Meeduma

  1. 1. MEEDUMA, KANDYA boutique hotel with a differenceInvestor PresentationMarch 2012
  2. 2. Table of contents Investment Rationale 3 Location Overview 4 Hotel Overview 8 Tourism Industry and Economic Overview 13 Financial & Investment Overview 24 The Next Steps 35
  3. 3. Investment Rationale• Opportunity to acquire 37.55% equity stake in Meeduma Hotel Kandy Limited (“Meeduma Kandy”) underincorporation;• Benefit from the 2.5 million projected tourist arrivals to Sri Lanka by 2015 and the hotel location(Kandy), where 80% of all tourist footfall is envisaged. As of end of December 2011, tourism arrivalsprojections were exceeded by nearly 15% with the total arrivals at 855,000 plus;• The hotel will be located in Heerasagala, Kandy – a mountainous area with picturesque, misty views of Kandyand its surroundings;• Hotel will feature 21 rooms (16 standard rooms and 5 deluxe rooms), restaurant, swimming pool, laundryfacilities etc.;• While the hotel will adhere to the highest standards in hospitality, the hotel will be operated in a fullyshariah-compliant manner;• Construction of the hotel is envisaged to be completed by end of March 2014, with the opening in June 2014,well before some of the other major hotels projects supply comes in to the market;• Expected Internal Rate of Return (IRR) in excess of 22%pa with a potential trade sale exit in 5 years.
  4. 4. Location Overview
  5. 5. Location AnalysisCity of Kandy• Kandy city is also home to ‘The Temple of the Tooth Relic’, one ofthe most venerable places for the Buddhist community in SriLanka and around the world. It was declared a world heritage siteby UNESSCO in 1988.• The hotel is located within close proximity to Kandy town,Mahaweli River, Peradeniya Botanical gardens and the hotels guestcan venture out to do the following activities:- Sight seeing on the Kandy town and historical buildings;- River rafting;- Kayaking ;- Mountain Hiking;- Mountain Biking; and- Many more…• The geographical location of Kandy as the center of the hill countryof Sri Lanka, is ideal for visitors to reach out to Nuwara Eliya,Haputale, some of the other most scenic places in Sri Lanka.
  6. 6. Location AnalysisSite Location & Views Actual View from the Property (On a Misty Day)
  7. 7. Location AnalysisSite Location & ViewsActual View from the Property (Normal vs. Misty day)
  8. 8. Hotel Overview
  9. 9. Hotel Specifications
  10. 10. Exterior Design
  11. 11. Interior Design
  12. 12. Interior Design
  13. 13. Tourism Industry andEconomic Overview
  14. 14. Tourism Industry Highlights• Sri Lanka Tourism has surged to a new high record of 654,476 arrivals in 2010, surpassing the previousall time high hits due to the post conflict peaceful environment.• Foreign Exchange (FE) receipts per tourist per day recorded an increase of US $ 6.2, from US $ 81.8 to US $88.0 in 2010, compared to the previous year .• Due to the rise of the arrivals, Tourism was able to upgrade its rank as the fifth largest FEearner The portion of tourism contribution to total FE earnings in 2010 amounted to 3.8%.• Western Europe emerged as the main source of tourism to Sri Lanka after the last four consecutive yearsaccounting 39.2% of the share. Asia was the second amounting its share as 37.3% 2010. The othersignificant contributors to the total are North America 6.1%, Eastern Europe 5.4% and Australasia & MiddleEast 5.7% each.• The average duration of stay increased to 10.0 as compared to 9.1 nights in the previous year.• The room occupancy rate of the graded establishments increased to 70.1% in 2010 as compared to48.4% in 2009. An astounding increase of 27.1%.• The total foreign guest nights recorded in graded accommodation establishments increased at a rate of46.4% in 2010 to 4,126,544 from 2,818,487 in the previous year .• Employment generated in the tourism sector (both direct and indirect) increased by 5.7% to 132,055 in2010.
  15. 15. Tourism IndustryWhat’s Ahead• Officials said there are about 3000 to 4000 star category rooms at Kandy city apart from the guest housesand home stay.• Authorities to promote heritage, indigenous products, culture and environmentally important places inKandy to the world
  16. 16. Tourism Industry Statistics Source: Annual Statistics Report 2010 by SLTDA
  17. 17. Tourism Industry Statistics Source: Annual Statistics Report 2010 by SLTDA Source: Annual Statistics Report 2010 by SLTDA
  18. 18. Tourism Industry Statistics Source: Annual Statistics Report 2010 by SLTDA Source: Annual Statistics Report 2010 by SLTDA
  19. 19. Tourism Industry StatisticsSource: Annual Statistics Report 2010 by SLTDA Source: Annual Statistics Report 2010 by SLTDA
  20. 20. Tourism Industry Statistics Source: Annual Statistics Report 2010 by SLTDA
  21. 21. Tourism Industry Statistics Source: Annual Statistics Report 2010 by SLTDASource: Annual Statistics Report 2010 by SLTDA
  22. 22. Tourism Industry Statistics
  23. 23. Tourism Industry Statistics
  24. 24. Financial and InvestmentOverview
  25. 25. Ownership Structure 37.55% Investors 1.45% Better Space 100% Meeduma Hotels 51% Hospitality Meeduma Hotel Holdings (Pvt.) & Resorts (Pvt.) /Industry Kandy Limited Limited Limited Consultant 10% Guardian Investment House (GIH)
  26. 26. Corporate GovernanceBoard of Directors Promoter - Mohamed A Chairman XXXXX (To be appointed) Vice – Chairman Guardian Investment House (GIH) Director Promoter - XXXXX (To be appointed) Director Promoter - XXXXX (To be appointed) Director XXXXX (To be appointed) Director XXXXX (To be appointed) Director
  27. 27. General Information• The proposal envisages raising app. LKR 85 million from selected group of investorsfor a 37.55% equity stake in Meeduma Hotel Kandy limited “the company”.• Promoters will contribute up to app LKR 50 million both cash and in kind and take a51% equity stake in the company.• Financial Advisors and Issue Manager, M/s. Guardian Investment House (GIH) shallcontribute both cash and in kind to take a 10% equity stake.• Investors IRR with a potential exit plan at end of 5 years is expected to be in excessof 22% pa.• Potential investors with LKR 15 million can avail a Board Seat in the company.
  28. 28. Financial OverviewSources & Uses
  29. 29. Financial OverviewFinancial Model Assumptions
  30. 30. Financial OverviewPro-Forma Income Statement
  31. 31. Financial OverviewPro-Forma Balance Sheet
  32. 32. Financial OverviewValuation Perspective and IRR
  33. 33. Financial OverviewExit StrategyAs any investment of this nature, exit strategy is key in realizing the investor’s capital plusgains. We have identified the following two potential scenarios for exiting the investors:Option 1 – The Promoter, Mr. Mohamed Azmeer may buyout the remaining equity at anacceptable market valuation. Therefore, Investors need to provide “first-right of refusal” toMr. Azmeer, prior to selling the shares to a third-party.Option 2 – Selling of the Hotel to a third-party in its entirety (trade sale)
  34. 34. The Next Steps
  35. 35. Current status of the project• The Promoters have filed necessary paper work with relevant approving authoritiesincluding but not limited to Sri Lanka Tourism Board, Kandy Municipal Council etc.• Short-listing of potential contractors and other relevant consultant/suppliers;• Finalizing the equity investors and shareholding agreements
  36. 36. DisclaimerImportant NoticeThis document is aimed at High net worth individuals and Institutional investors only.The information in this document is subject to change without notice. Any decision to purchase or subscribe for any product or service should be made at thesole discretion of the investor having considered the risks independently. Prior to purchasing any financial product or service; investors are advised toconsult their own business advisor, tax advisor and legal counsel as to business, tax, legal and related matters concerning an investment in the product orservice.Information and statistics contained herein have been compiled from or arrived at in good faith from sources believed to be reliable. Guardian InvestmentHouse (GIH) has not independently verified all the information given in this document. Accordingly, no representation or warranty, express or implied, ismade as to the accuracy, completeness or fairness of the information and opinions contained in this document. Guardian Investment House (GIH) does notaccept any liability for any loss arising from the use of this document or its contents or otherwise arising in connection therewith.Figures herein are provided for illustration purposes only and do not constitute a guarantee of future results or returns. No person in authorized to give anyinformation or make any representations not contained in this document. If given or made, such information or representation must not be relied upon asbeen authorized by Guardian Investment House (GIH).This document is not for distribution to the general public. It is directed at persons authorized to invest in such investment products or services and residingin jurisdictions where the distribution and sale of such products is not prohibited. It is the responsibility of every person assessing this document to satisfyitself as to the full observance of the laws of any relevant country, including obtaining any government or other consent which may be required or observingany other formality which needs to be observed in that country.This document is confidential and may not be reproduced or further distributed any other person (in whole or in part) for any purpose without the priorwritten consent of Guardian Investment House (GIH). Copyright © Guardian Investment House (GIH). All rights reserved.

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