Orascom Hotels Plans to Revive Egypt Projects, Reduce Bank Debt
(Bloomberg) — Egypt’s Orascom Hotels & Development plans to restart projects that were put on hold after the January 2011 uprising that toppled President Hosni Mubarak amid a revival in the country’s tourism industry.
The developer of resorts is in talks with investors to resume construction of the Four Seasons hotel and real estate complex in the Red Sea town of El Gouna, said Eskandar Tooma, chief financial officer of parent company Orascom Development Holding AG. It has restarted sales in other projects in Al Gouna, including Joubal and Ancient Sands, he said.
“We always said that we will be coming back to the Egyptian market when the situation stabilizes and now things are becoming more stable,” Tooma said in a phone interview from El Gouna on Jan. 5. “Tourism is picking up, which is reflected in the increased occupancy rates of our hotels.”
Egypt’s revenue from tourism more than doubled in the quarter that ended in September to $2.1 billion, central bank data show. Orascom Hotels, controlled by billionaire Samih Sawiris, is reviving projects after the company raised about $71 million from a 15 percent stake sale this month, reducing its parent’s share from almost 100 percent. The offering allowed the company to resume trading on Egypt’s stock exchange five years after the shares were suspended for not meeting the minimum free float requirement of 5 percent. The shares climbed 0.7 percent to 15.31 Egyptian pounds on Jan. 6.
The company plans to use some of the funds raised to reduce debt owed to banks by 700 million pounds ($98 million) to a total of about 1 billion pounds, Tooma said.
To contact the reporter on this story: Tamim Elyan in Cairo at telyan@bloomberg.net To contact the editors responsible for this story: Tarek El-Tablawy at teltablawy@bloomberg.net Dana El Baltaji, Samuel Potter
