Oman's first joint venture tourism project gets $105 million loan
The Barr al Jissah Resort Company and a consortium of lead arrangers of syndicated loan for the prestigious resort project on Monday signed a project finance agreement for $105 million loan. The two lead arrangers - Gulf International Bank and HSBC - have arranged the loan along with three other banks - Bahrain-based Arab Bank, BankMuscat and Bank Dhofar.
Of the total capital expenditure of RO 70 million, RO 25 million is raised by way of equity capital, RO 40 million commercial loan and RO 5 million soft loan. Of the equity capital, RO 15 million (60 per cent) is held by the Zubair Corporation, while the Omani government has RO 10 million (40 per cent) stake in the resort project, said Ziyad M al Zubair, who represents the Zubair Corporation in the resort company.
Of the $105 million loan, $32.5 million is offered by Gulf International Bank, $20 million by HSBC, $17.5 million by BankMuscat, $17.5 million by Bank Dhofar and $17.5 million by Arab Bank, Bahrain. The lending rate of the loan, which will be repaid over a period of 8 years starting from December 2007, is one per cent more than the six-monthly average of London Inter-Bank Offer Rate (Libor).
The managerial expertise came from the Hong Kong-based world leader in hospitality - Shangri La Hotels & Resorts, which manages 46 hotels and resorts worldwide.
Rashad bin Mohammed al Zubair, Vice Chairman and Group President of the Zubair Corporation, said that it is the Sultanate’s first ambitious joint venture tourism project to date. It will open doors for guests by the end of the year.
According to Oman Observer, Desmond Hatton, General Manager of Barr al Jissah Resort Company, said that the anticipated room tariff per day would be RO 70 for Al Waha five star family hotel, RO 90 for Al Bandar five-star business class hotel and RO 135 for the six star Al Husn hotel.
Further, there will be a full-fledged Spa and health club, Omani heritage village, a range of 19 food and beverage outlets, ballroom and meeting facilities and ample swimming pools with a man-made lazy river.
It is built on 450,000 square metre of beachfront property, most of which has been utilised for the existing development and the designed areas assigned for future development. The promoters expect 60 per cent room occupancy in the first year of operation and the company will achieve break-even in the second year.