Hilton Garden Inn Mauritius - Phoenix Business Hotel Development

Project Description

The Hilton Garden Inn Mauritius is an upper-midscale business hotel development in Phoenix, Mauritius, promoted by Ebene Square Ltd (ESL) and issued through Phoenix Hotels Ltd (PHL). The hotel is designed around a 'Live, Work & Play' concept to cater for both short and extended stays, with a signed Branding and Management Agreement with the Hilton Group. LOCATION & SITE: The hotel is being built on a 6,331 sqm plot of land in Phoenix, Mauritius. The land belongs to ESL and carries a post-development investment value of USD 2.7m, which has been transferred to PHL. DEVELOPMENT COST: Total development cost is USD 36m (excluding land cost), yielding a cost per key of USD 267k. The total cost makes provision for hard construction costs, infrastructure and IT connections, FF&E, professional fees, working capital, escalation costs, and a contingency allowance. FINANCING STRUCTURE: The project is financed with 40% equity (USD 15.5m) and 60% debt (USD 23.2m). PHL is raising debt via the issue of Secured Bonds up to USD 19.6m, with bondholders holding a first rank charge over PHL's assets. Debt coupon rate is Key Rate + 3.5% (all-in rate 8.0%) with a 7-year maturity. The hotel equipment is financed via leasing. Post-transaction LTV is approximately 60%. SHAREHOLDING STRUCTURE: ESH (Ebene Hospitality Ltd, the hospitality arm of the group with the same UBO and management team as ESL) is the largest single shareholder with 42% (including a Development Management Fee of USD 2.9m capitalized as shares). Strategic equity investors hold 58%. ESL's equity contribution is USD 4.6m (Land: USD 2.7m; Cash: USD 1.9m). FINANCIAL RETURNS: Estimated EBITDA averages USD 5.3m over 10 years of operations. Projected dividend of 5% per annum to ordinary shareholders as from the 2nd year of operation. Terminal value at Year 9 is estimated at 8x EBITDA. Project IRR is 14.0%, and Equity IRR for strategic investors is 11.5%. CONSTRUCTION TIMELINE: Start date July 2024, end date July 2026. Investment in 1st year: USD 10m; 2nd year: USD 26m. KEY PARTIES: Corporate Finance Advisor and Arranger: Maxima Capital Management Ltd; Company Secretary: Legacy Capital Co. Ltd; Banks: SBM Bank (Mauritius) Ltd, AfrAsia Bank Ltd; Registry and Paying Agent: SBM Fund Services Ltd; Broker: SBM Capital Markets Ltd; Legal Adviser: Orison Legal. DEVELOPER BACKGROUND: Ebene Square Ltd is a Mauritius-based real estate development company founded in 2015, with a proven track record in residential, commercial, office, and mixed-use real estate projects. The team has successfully completed 4 real estate projects with 3 more in the pipeline, totalizing a gross area of 49,000 sqm. RISK FACTORS: The pitch deck includes comprehensive risk analysis covering general risk factors, security-specific risk factors, competitor benchmarking, and the Hilton Garden Inn concept positioning within the Mauritian hospitality market.