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Jetwing in Rs.1.2 billion private placement to fund 4 hotel projects
The Jetwing Hotels group is currently in negotiations for a Rs.1.2 billion private placement, according to Jetwing Chairman Hiran Cooray.
The proceeds of the private placement, which is being facilitated by Capital Alliance (CAL), will be utilized to partially fund the construction of four hotel projects, namely: Jetwing Yala, Jetwing Colombo, Jetwing Dambulla and Jetwing ReefUppuveli on the East coast.
Construction on two of the properties is nearing completion, with Yala set to be operational by the end of this year, while the Colombo property has been reported to come on stream by April 2014.
“We’re still in the process of talking to potential investors so the structure of the private placement has not yet been finalized. Ideally, we are hoping for a complete private equity placement but there are a lot of options,” CAL Head of Capital Markets Deshan Pushparajah noted.
The total value of construction of all four properties is estimated to be nearly Rs.6 billion. The group will be financing construction through Rs.2.5-3.0 billion of internal funds with the remainder to be raised through debt funding.
Cooray went on to state that upon completion of all four projects, within the next two to three years, Jetwing would also look towards listing the company through an Initial Public Offering (IPO).
The four developments are carried out under the group’s new cluster, Jetwing Symphony.
The private placement was previously suspended in November last year, in part due to adverse market conditions. Nevertheless, Jetwing persevered with construction fuelled by internally raised funds.
(CF)
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