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FEASIBILITY STUDY
Proposed Marriott Hotel and Entertainment Complex
KINGSTON, GEORGETOWN, REPUBLIC OF GUYANA
SUBMITTED TO:PR OPOSED
The Chairman Atlantic Hotel, Inc. 126 Barrack Street Kingston, Georgetown, Guyana +592 255-0317
PREPARED BY:
HVS Consulting & Valuation Division of CHR Consulting Services, Inc. 8925 SW 148th Street, Suite 216 Miami, Florida 33176 +1 305 378-0404
September-2012
September-2012 Executive Summary Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
1. Executive Summary
The subjects of the feasibility study are three land parcels totaling ±380,409-square feet (±8.73 acres) to be improved with a full-service, upscale lodging facility and entertainment complex. We have assumed that the hotel will be affiliated with the Marriott brand and will open on March 1, 2014.
The subject site is located in the capital city of Guyana, Georgetown, in the Kingston area of the city (northwestern Georgetown). The subject site is contiguous to the Atlantic Ocean and the Demerara River.
RENDERING OF PROJECT
Subjects of the Feasibility Study
September-2012 Executive Summary Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
LOCATION OF THE SUBJECT SITE
Block Alpha – a 6.307-acre site being leased to Atlantic Hotel Inc. by the government of Guyana for a term of 99 years. This land parcel is available for purchase by Atlantic Hotel Inc. for $1,000,000.
Tract R – a 1.162-acre site which can be used for development but no permanent structures may be constructed. This parcel is leased to Atlantic Hotel Inc. for 99 years.
Tract P – a 1.264-acre site which will be the location of the promenade, north of the seawall. This parcel is leased to Atlantic Hotel Inc. for 99 years.
The proposed hotel is anticipated to feature 197 rooms, a restaurant, a bar, a lounge, an outdoor pool, a spa, a fitness center, a business center, and roughly 12,800 square feet of meeting and function space. The hotel will also feature all necessary back-of-the-house space. In total, the proposed hotel is expected to be seven stories high and span ±152,965 square feet.
September-2012 Executive Summary Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
The transient lodging market in Georgetown consists of independently-operated hotels and bed-and-breakfast establishments. The city’s most prominent hotel, the Pegasus Hotel, was formerly operated as a Le Meridien before it was deflagged in November 2008. Currently, there are no any internationally-branded lodging facilities in Guyana other than the Princess Hotel and Casino. It is our opinion that all of the lodging facilities in the city, even what is widely-regarded as the highest-quality option (the Pegasus Hotel), are “dated” with infrastructure and service standards below the anticipated quality of the proposed subject hotel.
The Pegasus Hotel, located in northwestern Georgetown (Kingston), is adjacent to the subject site. Currently, the majority of local, regional, and international businesspeople select this lodging facility as their accommodation of choice. This hotel is also the primary choice for virtually all local, regional, and international meetings, events, as well as a top local dining option. The Princess Hotel (250 rooms) is located adjacent to the Providence Stadium, the country’s primary and newest cricket stadium (and a significant generator of room night demand); the hotel was constructed primarily to support the 2007 Cricket World Cup (six late-round matches were held at Providence Stadium) and opened in late 2006. The Princess Hotel is outside of the central business district and thus not an attractive option for a significant portion of the country’s business and government travelers. The balance of the hotel room supply consists of boutique hotels and bed-and-breakfast facilities.
The following table reflects our estimates of operating data for hotels on an individual basis. These trends are presented in greater detail in the Supply and Demand Analysis chapter of this report.
Summary of Hotel Market Trends
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September-2012 Executive Summary Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
Based on our analysis presented in the Projection of Occupancy and Average Rate chapter, we have chosen to use a stabilized occupancy level of 62% and a base-year (2011) rate position of $150.00 for the proposed subject property. The following table reflects a summary of our market-wide and proposed subject property occupancy and average rate projections.
As discussed in the Transmittal Letter, in our derivation of the our projections of
occupancy and average rate for the greater competitive market and the subject hotel
itself, the basis of our financial projections, we have assumed that a portion of the
economic development initiatives outlined within the Market Area Analysis chapter
(Chapter 3) of this report gain traction. These include but are not limited to the
cultivation of a portion of Guyana’s crude oil.
FIGURE 1-2 MARKET AND SUBJECT PROPERTY AVERAGE RATE FORECAST – CALENDAR YEARS
Year
Base Year 51.6 % — $106.26 — — $150.00 141.2 %2012 53.5 — 110.51 — — 156.00 141.22013 55.0 3.5 % 114.38 — 3.5 % 161.46 141.2
Subject Hotel Opens (3/1) 2014 46.0 3.0 117.81 49.0 % 3.0 166.30 141.22015 46.5 3.0 121.35 53.0 3.0 171.29 141.22016 47.5 3.0 124.99 58.0 3.0 176.43 141.2
Stabilization 2017 48.5 3.0 128.74 62.0 3.0 181.72 141.2
Area-wide Market (Calendar Year) Subject Property (Calendar Year)
Average Rate
Average Rate Penetration
Average Rate Growth
Average Rate OccupancyOccupancy
Average Rate Growth
The following table summarizes the proposed subject property’s forecast based on an assumed opening date of March 1, 2014 and fiscal years (as opposed to calendar years, as presented in the preceding figure) beginning March 1, 2014.
FIGURE 1-3 FISCALIZED FORECAST OF AVERAGE RATE THROUGH STABILIZATION
Year
2014/15 49 % $167.112015/16 53 172.122016/17 58 177.292017/18 62 182.61
Occupancy Average Rate
Summary of Forecast Occupancy and Average Rate
September-2012 Executive Summary Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
The Feasibility Analysis chapter of this report converts these cash flows into an internal rate of return (i.e. a yield rate) indication for each debt and equity position, assuming the set-forth project development costs and the assumed debt and equity investment structure and parameters, which are based on our understanding of the investment offering made by the government of Guyana as well as the current hospitality real estate investment market conditions in the region.
FIGURE 1-11 YIELD TO THE DEBT AND EQUITY POSITIONS
Senior Debt Junior Debt Private Equity
Total ProjectRepublic Bank ($27m)Additional Debt ($4m)
Round IIFinancing
Private Equity Investment Interest Free Debt Common Equity
Blended NICILInvestment
($58,500,000) ($31,000,000) ($8,000,000) ($15,500,000) ($4,000,000) ($19,500,000)
1 $3,356,000 $1,529,000 $600,000 $600,000 $0 $600,0002 4,187,000 4,634,000 180,000 0 0 03 5,172,000 4,634,000 538,000 0 0 04 5,962,000 4,634,000 1,200,000 128,000 0 128,0005 6,133,000 4,634,000 ($1,750,000) 1,200,000 2,049,000 0 2,049,0006 6,183,000 4,634,000 140,000 1,200,000 209,000 0 209,0007 6,229,000 4,634,000 140,000 1,200,000 255,000 0 255,0008 6,408,000 4,634,000 140,000 1,200,000 434,000 0 434,0009 6,592,000 4,634,000 140,000 1,200,000 618,000 0 618,000
10 82,887,444 13,994,000 1,790,000 37,264,296 11,207,000 18,632,148 29,839,148
11.0% 8.9% 7.0% 22.2% 0.0% 16.6% 6.2%
Investment
Proj
ecti
on Y
ear
Rate of Return
NICIL Investment
Based on a total project cost of $58,500,000 the project is estimated to yield a return of 11.0% based on a ten-year holding period. In analyzing the returns to each investment position, a senior debt position (assumed, for the purpose of this report, to be held by Republic Bank and an second lender at terms equal to those held by Republic Bank) of $31,000,000 is projected to yield a return of 8.9%. Interest free debt of $15,500,000 will not yield returns (0.0%), while the NICIL equity investment of $4,000,000 is anticipated to yield a return of 16.6%. In total, the NICIL debt and equity investment totals $19,500,000 and is expected to yield an aggregate return of 6.2%. The assumed private equity investment of $8,000,000 is projected to yield a return of 22.2%.
Feasibility Conclusion
September-2012 Executive Summary Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
These returns are based on the analysis detailed within the body of this feasibility report and the assumptions that:
Senior debt receives payment before the preferred equity, the NICIL equity, and the NICIL debt positions;
Additional financing is drawn at the end of “projection year five,” while maintaining a DCR above 1.30 – this junior debt, or round two financing, is repaid immediately subordinate to the senior debt;
The preferred equity position receives a 15.0% return before subordinate positions are paid;
Interest free NICIL debt is repaid, when cash flows enable; NICIL debt repayment is based on an annual, cumulative maximum of 10.0% of the $15.5 million investment
NICIL equity has the right a 15.0% return on their $4 million investment, cash permitting, per year (not cumulative);
The remaining cash flows are divided between government and private equity. They are paid based on the pro rata share of the equity investment (one-third and two-thirds, respectively, or $4 million and $8 million of the total $12 million equity investment); and
The entertainment complex outfitting will be financed by the prospective operators.
Note: in our derivation of the our projections of occupancy and average rate for
the greater competitive market and the subject hotel itself, the basis of our
financial projections, we have assumed that a portion of the economic
development initiatives outlined within the Market Area Analysis chapter (Chapter
3) of this report gain traction. Our projections are contingent upon this
assumption.
In addition to the direct returns, the hotel and entertainment and entertainment complex would generate additional employment opportunities for the local population of Guyana. The construction and opening of the subject property would likely spur investment in the area immediately surrounding the development in order to capitalize on the ancillary spending of hotel guests, as well as increase the competitive standard of the area’s existing hotels.
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
5. Description of the Proposed Project
The quality of a lodging facility's physical improvements has a direct influence on marketability, attainable occupancy, and average room rate. The design and functionality of the structure can also affect operating efficiency and overall profitability. This section investigates the subject property's proposed physical improvements and personal property in an effort to determine how they are expected to contribute to attainable cash flows.
The Proposed Marriott Hotel and Entertainment Complex will be a full-service hotel lodging facility and entertainment complex lodging facility containing 197 rentable hotel units, a nightclub, and a casino. The property is anticipated to open on March 1, 2014.
Marriott International is a leading hospitality company with over 3,500 hotels worldwide. Marriott Hotels & Resorts is the company’s flagship brand of upscale, full-service hotels and resorts; as of year-end 2011, the brand comprised 337 properties in the U.S, 5 in the Caribbean, and 16 in Central and South America. Each Marriott hotel features multiple restaurants and lounges, a health club, room service, a swimming pool, a whirlpool, a sauna, a gift shop, a concierge, a business center, and meeting facilities. The properties also benefit from their participation in Marriott Rewards, a successful frequent-guest program. The main competitors of the Marriott brand include Hilton, Embassy Suites, DoubleTree, Sheraton, Westin, Fairmont, Hyatt, and InterContinental, among others.
Project Overview
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
ARTIST’S RENDERING: MARRIOTT HOTEL
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
Based on information provided by the proposed subject property’s development representatives, the following table summarizes the facilities that are expected to be available at the proposed subject property.
FIGURE 5-1 PROPOSED FACILITIES SUMMARY
Guestroom Configuration
King 108 Double/Double 84 Suite 4 Governor's Suite 1
Total 197
Food & Beverage Facilities
Three-Meal Restaurant 120 Pool Bar & Grill 40
Amenities & Services
12,309 Square Feet of Function Space
Vending Areas Gift/Sundry Shop
SpaBusiness Center
Gift Shop/Sundries Retail Outlets
Fitness CenterOutdoor Swimming Pool
Number of Units
Seating Capacity
Summary of the Facilities
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
Once guests enter the site, ample parking will be available on the surface lot, planned to be built to the west and south the perimeter of the hotel. Site improvements will include free-standing signage, which will be located as to maximize the exposure to the street (additional signage will also be placed on the exterior of the building). We assume that all signage will adequately identify the property and meet brand standards. Planned landscaping appears to allow for a positive guest impression. The development plans call for a competitive exterior appearance which gives guests a "sense of arrival." Overall, the planned site improvements for the property appear adequate.
ARTIST’S RENDERING: HOTEL AND ENTERTAINMENT CENTER – CIRCULATION PLAN
Site Improvements and Hotel Structure
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
Overall, the planned building components appear normal for an upscale hotel of this type and should meet the standards for this Caribbean/South American market. We assume that all structural components will meet Marriott brand and life-safety standards, local building codes, and that no significant defaults will occur during construction that may impact the future operating potential of the hotel or delay its assumed opening date.
Guests are expected to enter the hotel through a single set of automatic doors, which will open to a vestibule, and then through a second set of automatic doors. The lobby should be spacious, appropriate for a Marriott-branded hotel in the Caribbean region. The lobby walls are anticipated to be attractively finished with a significant portion of glass and other upscale materials that are in line with brand standards. The property design appears to allow for a view corridor from the lobby, across the pool, and out to the Atlantic Ocean. The front desk should feature a granite countertop and is expected to be installed with appropriate property management and telephone systems. The furnishings and finishes in this space should offer an appropriate first impression, and the design of the space should lend itself to adequate efficiency. The specific design concept will be finalized with input from the pursued future brand for the proposed subject property. We assume that all property management and guestroom technology will be appropriately installed for the effective management of hotel operations.
Lobby
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
ARTIST’S RENDERING: HOTEL LOBBY
The hotel is expected to offer one three-meal restaurant with 120 seats, a poolside bar and grill with 40 seats, and a lounge and bar experience with an additional 40 seats. We have assumed that the food and beverage outlets will all be located on the ground floor which will bolster the food and beverage outlets' curbside appeal. The furnishings of these spaces are anticipated to be of a similar style and finish as lobby and guestroom furnishing.
In addition to the Marriott-operated food and beverage facilities, the complex is anticipated to feature a 200-person, 8,359-square-foot specialty restaurant.
Food and Beverage Facilities
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
SAMPLE OF A MARRIOTT DINING AREA
Overall, the hotel is expected to provide a competitive offering of food and beverage facilities for an upscale, full-service property. We expect the food and beverage offerings to be positioned higher than the existing facilities at the Pegasus and the Princess Hotels, and in line with New Thriving Chinese Restaurant with regards to quality and price point.
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
FLOOR PLAN: GROUND FLOOR
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
FLOOR PLAN: SECOND FLOOR
Under a full-service, upscale scope, the proposed hotel should offer a significant amount of modern and technologically advanced meeting space. We expect the integration of a fully divisible grand ballroom and primary meeting space along with additional smaller breakout rooms and boardroom-type spaces (totaling 12,309 square feet, or approximately 62 square feet per guestroom. This space should be adequate to simultaneously host multiple events and should be acceptable based on the market expectations for local, regional, and international public and private social functions, events, business meetings, and conferences.
The hotel will offer a fitness center and a spa/salon operation, planned for location on the hotel's ground level. The spa will feature one treatment room and salon services. The current site plan calls for a 2,474-square-foot footprint for these facilities.
Other amenities are expected to include a full-service business center with various workstations, a gift and sundries shop, and wireless Internet access in the public areas. Ice machines will be located on each floor where guestrooms are present. Overall, the supporting facilities should be appropriate for a hotel of this type, and we assume that they will meet the Marriott brand standards.
Meeting and Banquet Space
Hotel Recreational Amenities
Additional Hotel Amenities
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
The hotel is expected to feature standard and suite-style guestroom configurations, and guestrooms will be present on the third through twelfth levels of the property within the single building. The guestrooms will be large and will offer standard amenities for this upscale product type. In addition to the standard furnishings, rooms are expected to feature an iron and ironing board, a coffeemaker, and high-speed Internet access. Suites, which will be available for a premium rate, will provide a larger living area with additional furnishings and other upgraded amenities. Overall, the guestrooms will greatly improve the standard in this market.
GUESTROOM FLOOR PLAN
The interior guestroom corridors should be wide and functional, permitting the easy passage of housekeeping carts. Corridor carpet, wall vinyl, signage, and lighting should be in keeping with the overall look and design of the rest of the property.
The hotel will be served by the necessary back-of-the-house space, including an in-house laundry facility, administrative offices, and the appropriate amount of kitchen space to serve the needs of the Marriott-operated restaurant and dining facilities. These spaces should be adequate for a hotel of this type and should allow for the efficient operation of the property under competent management.
We assume that the property will be built according to all pertinent codes and brand standards. Moreover, we assume its construction will not create any environmental hazards (such as mold) and, given the assumed Marriott brand affiliation and the significant amount of anticipated business from the United States, that the property will fully comply with the Americans with Disabilities Act (ADA).
Guestrooms
Hotel Back-of-the-House
ADA and Environmental
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
Our analysis assumes that, after its opening, the hotel will require ongoing upgrades and periodic renovations in order to maintain its competitive level in this market. These costs should be adequately funded by the forecasted reserve for replacement, as long as a successful, ongoing preventive-maintenance program is employed by hotel staff.
As discussed, the complex will feature additional components that will not be operated or affiliated with Marriott. These components include (1) a 14,761-square-foot casino, a (2) 6,401-square-foot nightclub, (3) a 8,359-square-foot restaurant that can seat at least 200 people, and (4) 1,485 square feet of retail space.
Casino: The hotel and the casino will be operated completely separate from each other. Marriott retains the right to approve the operator selected by Atlantic Hotel Inc. We have assumed that casino will not require a footprint or view of waterfront, as these facilities are virtually enclosed with the goal of seclusion in mind. We suggest that the casino entrance not interfere with the day-to-day operations of the hotel.
The only other casino in the country is located at the Princess Hotel, adjacent to the Providence Stadium. The Guyanese government has passed legislation limiting the number of casinos in the country to three. For a hotel to operate a casino, it must maintain more than 160 guestrooms (thus excluding the Pegasus as it currently stands).
The casino at the subject property is expected to be ±14,761 square feet. Based on this footprint, we believe that 10 “table games” and 250 “machine games” are feasible and adequate for the operation.
Nightclub: As is the case with the casino, this component of the complex is not affiliated with Marriott nor will it be operated by Marriott, though Marriott does retain the right to approve the operator of the amenity. We suggest that the nightclub will maintain a private dedicated entrance so that the day-to-day operations of the hotel are not interrupted. Developers must be careful to install the correct and appropriate sound-proofing measures so that guests of the hotel are not disturbed by the music or the guests coming in and out of the facility.
Restaurant: The 200+ person restaurant is intended to complement the food and beverage facilities being operated by the hotel. Having numerous options for dining at the hotel will ultimately enhance the guest experience and should encourage hotel guests to eat off-site less frequently. It would be beneficial for the entrance to the restaurant to be on the ground floor in order to enhance the “curbside appeal.”
Capital Expenditures
Additional Components of the Entertainment Complex
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
We anticipate that this restaurant will be positioned to compete with the high-level restaurants in Georgetown. These include New Thriving Chinese Restaurant and the dining facilities at the Pegasus Hotel. We anticipate that this restaurant is open for lunch and dinner seven days per week. As is the case with the additional components within the collective complex, this facility will not be operated by Marriott nor will it be affiliated with Marriott; therefore we suggest that the facility maintain a private entrance so the day-to-day operations of the hotel and the guest experience at the hotel are not interrupted.
Retail: The revenue and expenses associated with the ±1,485 square feet of retail space has been incorporated into the hotel component, in the “rentals and other income” line item. This retail space should be in line with the quality and aesthetics of the rest of the development.
The construction budget for the 197-room subject hotel, casino, nightclub, and restaurant (i.e. the entire mixed-use development), as provided by the current project manager, is reported to be approximately $58.5 million. This figure is exclusive of land but note that the property developer reserves the right to purchase the land from the government of Guyana for a sum of $1,000,000 anytime after one year of operations.
FIGURE 5-1 SUMMARY OF THE PROJECT’S DEVELOPMENT COST
Hotel PromenadeEntertainment
Complex Total Development
Construction Cost (includes fitout of hotel) $44,711,029 $200,000 $4,119,083 $49,030,112Fitout Cost - - 4,000,000 4,000,000Other Cost 1,560,000 - - 1,560,000Subtotal - Hard Costs 46,271,029 200,000 8,119,083 54,590,112
Architect 1,888,000 - - 1,888,000Architect Supervision 1,000,000 - - 1,000,000Subtotal - Soft Cost 2,888,000 - - 2,888,000
Contingency 1,000,000 - - 1,000,000
Total $50,159,029 $200,000 $8,119,083 $58,478,112
Rounded $58,500,000
Construction Budget
September-2012 Description of the Proposed Project Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
Overall, the Marriott Hotel and Entertainment Complex should offer a well-designed, functional layout of support areas, guestrooms, and amenities. All typical and market-appropriate features and amenities appear to be included in the property's design. We assume that the building will be fully open and operational on the assumed opening date (March 1, 2014) and will meet all of Guyana's and Georgetown's building codes while conforming to Marriott's international brand and life/safety standards in addition to the dynamic expectations of consumers. Furthermore, we assume that the hotel staff will be adequately trained to allow for a successful opening and that pre-marketing efforts
will have introduced the product to major accounts at least six months in advance of
the opening date.
Conclusion
September-2012 Feasibility Analysis Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
8. Feasibility Analysis
Return on investment can be defined as the future benefits of an income-producing property relative to its acquisition or construction cost. The first step in performing a return on investment analysis is to determine the amount to be initially invested. For a proposed property, this amount is most likely to be the development cost of the hotel. Based on the total development cost, the individual investor will utilize a return on investment analysis to determine if the future cash flow from a current cash outlay meets his or her own investment criteria and at what level above or below this amount such an outlay exceeds or fails to meet these criteria.
The construction budget for the 197-room subject hotel, casino, nightclub, and restaurant (i.e. the entire mixed-use development), as provided by the current project manager, is reported to be approximately $58.5 million. This figure is exclusive of land but note that the property developer reserves the right to purchase the land from the government of Guyana for a sum of $1,000,000 anytime after one year of operations.
FIGURE 8-1 SUMMARY OF THE PROJECT’S DEVELOPMENT COST
Hotel PromenadeEntertainment
Complex Total Development
Construction Cost (includes fitout of hotel) $44,711,029 $200,000 $4,119,083 $49,030,112Fitout Cost - - 4,000,000 4,000,000Other Cost 1,560,000 - - 1,560,000Subtotal - Hard Costs 46,271,029 200,000 8,119,083 54,590,112
Architect 1,888,000 - - 1,888,000Architect Supervision 1,000,000 - - 1,000,000Subtotal - Soft Cost 2,888,000 - - 2,888,000
Contingency 1,000,000 - - 1,000,000
Total $50,159,029 $200,000 $8,119,083 $58,478,112
Rounded $58,500,000
Construction Budget
September-2012 Feasibility Analysis Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
In accordance with the investment offering made by the government of Guyana, the cash returns from the development are prioritized in the following manner:
1. Senior debt
a. We have assumed that $27.0m of the project is funded by Republic Bank at an 8.65% interest rate for the hotel component, with irregular loan payments as per the attached term sheet from Republic National Bank (see addenda). The senior debt position amounts to $31.0 (roughly 46% of the total $58.5 million cost). We have also assumed that the operator of the entertainment complex would source $4.0 from a debt partner at terms equal to the hotel component (an 8.65% interest rate).
b. Senior debt reserves priority with regards to the cash returns and will receive their interest payment prior to any distributions being made to any and all subordinate loan stock.
c. The collective senior debt of $31.0 million accounts for 53.0% of the assumed total development cost of $58.5 million.
2. Junior debt/Round II financing – additional financing will be drawn upon stabilization in order to maximize profitability and provide dividends to the investors from the loan proceeds.
3. Equity investment – the balance of the development cost is to be funded by equity investment, partially comprised of investment from a private equity partner ($8m) and partially from NICIL ($4m).
a. Private equity investment
i. The government of Guyana is seeking investment from a private equity position in the amount of $8.0 million. This investment equates to roughly 29.0% of the balance of the project cost after the senior debt is accounted for or approximately 14% of the assumed total development cost.
ii. The private equity position is guaranteed a 15.0% return (after senior and junior debt service) before returns are made to subordinate positions.
b. NICIL investment
September-2012 Feasibility Analysis Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
i. We have assumed that the National Industrial and Commercial Investments Limited (NICIL) will invest $15.5 million as subordinate loan stock, interest free. This accounts for roughly 71.0% of the equity component and 33% of the total project development costs.
ii. We have assumed NICIL will invest $4m in equity; this position receives a 15.0% return, cash permitting, after the private equity position receives its 15.0% and the debt service positions are paid.
c. After the private equity position is paid its 15.0% return and the subordinate NICIL equity is paid its 15.0% return (non cumulative), remaining cash flows are divided based on a pro rata share of the total equity investment (one-third to the government and two-thirds to the private investor).
Based on the projected net income levels for the collective project, the assumed distribution of the cash flows by investment position is displayed in the table on the following page.
Sept
embe
r-20
12
Feas
ibili
ty A
naly
sis
Pr
opos
ed M
arri
ott
Hot
el a
nd E
nter
tain
men
t Com
plex
– K
ings
ton,
Geo
rget
own,
Rep
ublic
of G
uyan
a
FIG
URE
8-2
S
UM
MA
RY O
F TH
E PR
OJECT’S D
EVEL
OPM
ENT
COST
S A
ND
CA
SH F
LOW
S
12
34
56
78
910
Tota
l Net
Inco
me
- Col
lect
ive
Proj
ect
$58,
500,
000
$3,3
56,0
004,
187,
000
5,17
2,00
05,
962,
000
6,13
3,00
06,
183,
000
6,22
9,00
06,
408,
000
6,59
2,00
082
,887
,444
*
Seni
or/R
ound
I D
ebt F
inan
cing
(1)
$31,
000,
000
53.0
%of
the
tota
l dev
elop
men
t cos
t
Ann
ual D
ebt S
ervi
ce (R
etur
n to
Sen
ior/
Roun
d I L
ende
r)$1
,529
,000
4,63
4,00
04,
634,
000
4,63
4,00
04,
634,
000
4,63
4,00
04,
634,
000
4,63
4,00
04,
634,
000
13,9
94,0
00^
Deb
t Ser
vice
Att
ribu
tabl
e to
Hot
el C
ompo
nent
(1a)
$27,
000,
000
$1,3
31,7
104,
036,
065
4,03
6,06
54,
036,
065
4,03
6,06
54,
036,
065
4,03
6,06
54,
036,
065
4,03
6,06
512
,188
,323
Deb
t Ser
vice
Att
ribu
tabl
e to
Add
ition
al A
men
ities
(1b)
$4,0
00,0
00$1
97,2
9059
7,93
559
7,93
559
7,93
559
7,93
559
7,93
559
7,93
559
7,93
559
7,93
51,
805,
677
Cash
Car
ryov
er fr
om P
revi
ous
Year
-
627,
000
-
-
-
-
-
-
-
-
A
vaila
ble
Cash
Flo
w a
fter
Sen
ior/
Roun
d I F
inan
cing
$1,8
27,0
00(4
47,0
00)
538,
000
1,32
8,00
01,
499,
000
1,54
9,00
01,
595,
000
1,77
4,00
01,
958,
000
68,8
93,4
44
Juni
or/R
ound
II D
ebt F
inan
cing
(2)
1,75
0,00
0Ca
sh R
etur
n to
Rou
nd II
Deb
t Pos
ition
140,
000
140,
000
140,
000
140,
000
1,79
0,00
0^^
Ava
ilabl
e Ca
sh F
low
aft
er R
ound
I an
d Ro
und
II Fi
nanc
ing
$1,8
27,0
0018
0,00
0
538,
000
1,32
8,00
03,
249,
000
1,40
9,00
01,
455,
000
1,63
4,00
01,
818,
000
67,1
03,4
44Pr
ojec
t Deb
t Cov
erag
e Ra
tio
2.19
1.04
1.12
1.29
1.32
1.30
1.30
1.34
1.38
5.25
Pref
erre
d Pr
ivat
e Eq
uity
Inve
stm
ent
$8,0
00,0
0066
.7%
of to
tal e
quity
inve
stm
ent
Retu
rn R
equi
red
15.0
0%An
nual
Ret
urn
Thre
shol
d$1
,200
,000
$1,2
00,0
001,
200,
000
1,20
0,00
01,
200,
000
1,20
0,00
01,
200,
000
1,20
0,00
01,
200,
000
1,20
0,00
01,
200,
000
Cash
Ret
urn
to P
riva
te, P
refe
rred
Equ
ity
(3)
$600
,000
180,
000
538,
000
1,20
0,00
01,
200,
000
1,20
0,00
01,
200,
000
1,20
0,00
01,
200,
000
1,20
0,00
0A
vaila
ble
Cash
Flo
w a
fter
Sen
ior
Deb
t and
Equ
ity P
rior
ity1,
227,
000
-
-
12
8,00
02,
049,
000
209,
000
255,
000
434,
000
618,
000
65,9
03,4
44
D
Bala
nce
to b
e Fu
nded
by
NIC
IL In
vest
men
t$1
9,50
0,00
033
.3%
of th
e to
tal d
evel
opm
ent c
ost
Inte
rest
Fre
e D
ebt a
nd R
etur
n Th
resh
old
(4)
$15,
500,
000
$1,5
50,0
001,
550,
000
1,55
0,00
0
1,
550,
000
1,55
0,00
0
1,
550,
000
1,55
0,00
0
1,
550,
000
1,55
0,00
0
1,
550,
000
Ca
sh R
etur
n to
Inte
rest
Fre
e N
ICIL
Deb
t Pos
ition
$600
,000
-
-
12
8,00
0
2,04
9,00
0
20
9,00
0
255,
000
43
4,00
0
618,
000
11
,207
,000
Cum
ulat
ive
Cash
Ret
urn
to In
tere
st F
ree
Gov
t. D
ebt P
ositi
on$6
00,0
0060
0,00
0
600,
000
728,
000
2,
777,
000
2,98
6,00
0
3,
241,
000
3,67
5,00
0
4,
293,
000
15,5
00,0
00
Cum
ulat
ive
Am
ount
Ow
ed$1
,550
,000
3,10
0,00
0
4,
650,
000
6,
200,
000
7,75
0,00
0
9,
300,
000
10,8
50,0
00
12,4
00,0
00
13,9
50,0
00
15,5
00,0
00
A
mou
nt S
till D
ue$9
50,0
002,
500,
000
4,05
0,00
0
5,47
2,00
0
4,
973,
000
6,31
4,00
0
7,
609,
000
8,72
5,00
0
9,
657,
000
-
A
vaila
ble
Cash
Flo
w a
fter
Rou
nd I,
Rou
nd II
, and
Gov
ernm
ent D
ebt
627,
000
-
-
-
-
-
-
-
-
54
,696
,444
Tota
l Equ
ity
Inve
stm
ent (
Priv
ate
and
Gov
ernm
ent)
$12,
000,
000
NIC
IL C
omm
on E
quity
(5)
$4,0
00,0
0033
.3%
of to
tal e
quity
inve
stm
ent
NIC
IL C
omm
on E
quity
Mat
chin
g Re
turn
Thr
esho
ld15
.00%
Annu
al R
etur
n Th
resh
old
$600
,000
$600
,000
600,
000
60
0,00
0
600,
000
60
0,00
0
600,
000
60
0,00
0
600,
000
60
0,00
0
600,
000
Prel
imin
ary
Cash
Ret
urn
to G
over
nmen
t Equ
ity-
-
-
-
-
-
-
-
-
60
0,00
0
Seco
ndar
y Ca
sh R
etur
n to
Equ
ity -
Priv
ate
Com
pone
nt66
.67%
-
-
-
-
-
-
-
-
-
36
,064
,296
Seco
ndar
y Ca
sh R
etur
n to
Equ
ity -
Gov
ernm
ent C
omm
on E
quity
Pos
ition
33.3
3%-
-
-
-
-
-
-
-
-
18,0
32,1
48
Sum
mar
yA
Tota
l Cas
h Fl
ows
to R
ound
I D
ebt
(31,
000,
000)
$
$1,5
29,0
004,
634,
000
4,63
4,00
0
4,63
4,00
0
4,
634,
000
4,63
4,00
0
4,
634,
000
4,63
4,00
0
4,
634,
000
13,9
94,0
00
B
Tota
l Cas
h Fl
ows
to R
ound
II D
ebt
-
-
-
-
(1
,750
,000
)$
14
0,00
0
140,
000
14
0,00
0
140,
000
1,
790,
000
C
Tota
l Cas
h Fl
ows
to P
riva
te E
quity
(8,0
00,0
00)
$
$6
00,0
0018
0,00
0
538,
000
1,20
0,00
0
1,
200,
000
1,20
0,00
0
1,
200,
000
1,20
0,00
0
1,
200,
000
37,2
64,2
96
D
Tota
l Cas
h Fl
ows
to N
ICIL
(Deb
t and
Equ
ity)
(19,
500,
000)
$
600,
000
-
-
128,
000
2,
049,
000
209,
000
25
5,00
0
434,
000
61
8,00
0
29,8
39,1
48
*10t
h ye
ar n
et in
com
e of
$6,
785,
000
plus
sal
es p
roce
eds
of $
76,1
02,0
00(b
ased
on
a 9.
0% te
rmin
al c
apita
lizat
ion
rate
and
tran
sact
ion
cost
s of
2.0
%)
^10t
h ye
ar d
ebt s
ervi
ce o
f $4,
634,
000
plus
out
stan
ding
mor
tgag
e ba
lanc
e of
rou
ndly
$9,
360,
000
^^D
ebt s
ervi
ce o
f $14
0,00
0 pl
us o
utst
andi
ng m
ortg
age
bala
nce
of r
ound
$1,
650,
000
(1) C
ompr
ised
of $
27m
from
Rep
ublic
Ban
k an
d $4
m a
t ter
ms
assu
med
to b
e eq
ual;
sour
ced
from
pre
sent
atio
n to
Inve
stor
s by
Gov
ernm
ent o
f Guy
ana
- deb
t ser
vice
pay
men
ts a
re a
lloca
ted
base
d on
pro
rat
a sh
are
(4) I
nter
est f
ree
debt
from
gov
ernm
ent i
s re
paye
d fr
om th
e ca
sh fl
ows
afte
r Ro
und
I and
II d
ebt a
nd p
refe
rred
equ
ity, a
t a m
axim
um o
f 10.
0% (c
umul
ativ
e) p
er y
ear
Proj
ecti
on Y
ear
(2) R
ound
II fi
nanc
ing
sour
ces
addi
tiona
l deb
t bas
ed o
n 7%
inte
rest
, 30
year
s, m
onth
ly p
aym
ents
; thi
s ra
ises
the
tota
l deb
t at t
he e
nd o
f yea
r 3
by $
1,75
0,00
0, a
llow
ing
for
dist
ribu
tion
of a
div
iden
d pa
yout
bas
ed o
n lo
an p
roce
eds
(5) G
over
nmen
t equ
ity p
ositi
on is
com
pris
ed o
f a $
4m in
vest
men
t; th
is p
ositi
on r
ecei
ves
15.0
% o
f the
ir $
4m in
vest
men
t bef
ore
the
rem
aini
ng c
ash
flow
s ar
e al
loca
ted
betw
een
priv
ate
and
gove
rnm
ent e
quity
bas
ed o
n a
pro
rata
sha
re o
f the
tota
l $12
m
equi
ty in
vest
men
t (on
e-th
ird
and
two-
thir
ds)
C-1 D-1B C-2, D-2
(3) W
e ha
ve a
ssum
ed a
yea
r on
e pa
ymen
t to
priv
ate
equi
ty b
elow
the
15.0
% ($
1.2m
) thr
esho
ld in
ord
er to
app
ly e
xces
s re
venu
es to
yea
r 2
cash
flow
s (w
hen
addi
tiona
l mon
eys
are
need
ed to
cov
er d
ebt s
ervi
ce)
A
September-2012 Feasibility Analysis Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
Based on the preceding cash flows, as illustrated in Figure 8-2 on the previous page, the return on investment can be derived for each debt and equity position. Following figure outlines the returns to each debt and equity position based on the assumed net income levels and cash returns as established within this report.
FIGURE 8-3 SUMMARY OF THE PROJECT’S RETURNS ON INVESTMENT
Senior Debt Junior Debt Private Equity
Total ProjectRepublic Bank ($27m)Additional Debt ($4m)
Round IIFinancing
Private Equity Investment Interest Free Debt Common Equity
Blended NICILInvestment
($58,500,000) ($31,000,000) ($8,000,000) ($15,500,000) ($4,000,000) ($19,500,000)
$3,356,000 $1,529,000 $600,000 $600,000 $0 $600,0004,187,000 4,634,000 180,000 0 0 05,172,000 4,634,000 538,000 0 0 05,962,000 4,634,000 1,200,000 128,000 0 128,0006,133,000 4,634,000 ($1,750,000) 1,200,000 2,049,000 0 2,049,0006,183,000 4,634,000 140,000 1,200,000 209,000 0 209,0006,229,000 4,634,000 140,000 1,200,000 255,000 0 255,0006,408,000 4,634,000 140,000 1,200,000 434,000 0 434,0006,592,000 4,634,000 140,000 1,200,000 618,000 0 618,000
82,887,444 13,994,000 1,790,000 37,264,296 11,207,000 18,632,148 29,839,148
11.0% 8.9% 7.0% 22.2% 0.0% 16.6% 6.2%
NICIL Investment
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
Overview of Project, as provided by Client
The Marriott project has been on the cards for close to a decade; many doubted that the project would be realized, partly on account of negative reporting by sections of the media. Notwithstanding, the project has been supported by the private sector, save and except the Guyana Pegasus Hotel, built about 40 years ago, and de-branded in 2008.
Throughout the entire process of this project, the Government/AHI has employed public advertisements to advance each stage of the project:
a. 2009—Advertisement for a Public Private Partnership, “Request for Expressions of Interest (EOI) Joint Venture for Hotel Development.”
b. 2010—Advertisement for “Pre-Qualification of Contractors”
c. 2012—Advertisement for a Supervision Firm “Requests for Proposals”
d. 2012—Advertisement for “Final Call for Expressions of Interest (EOI) to participate in AHI’s (Marriott Hotel Project) private equity.”
e. 2012—Advertisement for “Atlantic Hotel Inc (AHI.) Requests for Expressions of Interest (EOI) from Casino/Nightclub/Restaurant Operators”
The project is a mixed used property with a hotel (operated by Marriott) and an Entertainment Complex (casino, nightclub, and restaurant) each separately operated, and a concrete promenade that will connect the existing seawall with a pier. All income, expenses, assets and liabilities of the components (Hotel, Nightclub, Casino and Restaurant) will be in the name of AHI. Operators for the hotel, casino, nightclub and restaurant, are only operators, receiving fees in the following possible forms:
Management fee Marketing and Advertisement Fee Royalty/Franchising Fee Incentive Fee
Executed agreements exist with Marriott; the operators for the Entertainment Complex will be sourced from interested parties.
Introduction
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
By mid-2014, Guyana expects to open 197 rooms Marriott Hotel and Entertainment Complex that will be the first major brand to come to Guyana in over 40 years. This project is expected to elevate the standards of quality and service in the hotel and hospitality sector, and enable Guyana to better promote and cater for travel and tourism, as Guyana continues on an upward path of investment and development.
CHRONOLOGY OF KEY EVENTS
Updated Studies completed and Mobilization by Contractor
2012
Updated Feasibility Studies completed by HVS ; SCG granted possession of site following receipt of 20% Advance Payment;
construction works started; Building Permission and Environmental Permits received; Advertisement for “Final Call for Expressions of Interest (EOI) to participate in AHI’s
(Marriott Hotel Project) private equity.” Following a public tender, M.A. Angeliades Inc. was selected as Supervision Firm for
the construction. Advertisement issued inviting Expressions of Interest for prospective operators of
the Entertainment Complex (casino, nightclub, and restaurant)
Execution of Design Build Contract, Financing, SOD
2011
Seven prequalified firms invited to bid for the construction of the Hotel and Entertainment Complex;
Two bids received; given the unduly high bids received, alternative designs/proposals invited from the two bidders;
Tax Agreement for the project executed between AHI and the Government of Guyana;
Land agreements executed in favour of AHI; Term sheet executed by Republic Bank Limited and AHI for the secured debt
component of the project financing (US$27 M); SCG International (T&T) Ltd. selected as the Design Build Contractor with a FIDIC
contract being executed in November 2012; Sod turning ceremony held in Guyana in November 2012, with participation by
Marriott, Shanghai Construction Group (the Contractor), RBL and Government.
Chronology of Key Events for Project
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
CHRONOLOGY OF KEY EVENTS
Execution of Marriott Agreements and Requesting Proposals for Construction of the Hotel
2010
Public Tender advertised inviting contractors to seek prequalification for construction;
Design works start following execution of a design contract with a New York Based architectural firm;
Marriott International announces has executed agreements with Atlantic Hotel Inc. (AHI) to operate the Marriott franchise in Guyana. These agreements are as follows:
i. Management Agreement; ii. License and Royalty Agreement;
iii. Technical Services Agreement; iv. International Services Agreement.
Early Development
2004-2009
Discussions started on the Marriott Hotel via a private investor; Land cleared of most of the buildings and leveled; Sewerage lines relocated to allow for construction on the land; Amendments passed to Guyana’s Gambling Prevention Act to allow for the creation
of a Gaming Authority and the issuance of casino licenses where a hotel was being constructed with at least 150 rooms;
Environment and Social Impact Assessments (ESIA) prepared Advertisement for a Public Private Partnership, “Request for Expressions of Interest
(EOI) Joint Venture for Hotel Development.” Letter of Intent (LOI) executed between AHI and Marriott for Marriott International
to be the hotel operator/manager.
The capital cost for the project is made up of US$58 M, broken down into US$12 M in equity and the remainder in debt. The Government of Guyana, via its investment holding company, NICIL, has already injected US$19.5 M representing 1/3 of the funding for the project (US$4 M as equity for 33% and the remainder as non-interest bearing subordinate debt). The private investor will invest US$8 M for 67% of the equity and will control the Board of Directors. In order to make the project attractive for private investors, NICIL has subordinated its return/repayment of debt to both the private debt providers and the private equity investor. Available cash flows from operations (EBITDA) will be disbursed first for debt service to Republic Bank, followed by debt service of the Entertainment Complex, outfitting, followed by up to 15% to the private equity investor. Therefore in any one year, the private equity investor will obtain its return, prior to any cash flows available to pay the debt of NICIL and provide a return. Once NICIL annual debt is cleared (over 15 years) and
Project Structure and Summary of Key Participants
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
NICIL’s 15% nominal return is accomplished, excess cash flows are distributed pro-rata among the equity holders.
ATLANTIC HOTEL, INC.
The order of capital injection into AHI is as follows: NICIL common equity and subordinate loan stock (already invested)
Equity investment from private equity investor (to be identified)
Debt from both Republic Bank and the operators of the Entertainment
Complex
September-2012 Feasibility Analysis Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
Based on the preceding cash flows, as illustrated in Figure 8-2 on the previous page, the return on investment can be derived for each debt and equity position. Following figure outlines the returns to each debt and equity position based on the assumed net income levels and cash returns as established within this report.
FIGURE 8-3 SUMMARY OF THE PROJECT’S RETURNS ON INVESTMENT
Senior Debt Junior Debt Private Equity
Total ProjectRepublic Bank ($27m)Additional Debt ($4m)
Round IIFinancing
Private Equity Investment Interest Free Debt Common Equity
Blended NICILInvestment
($58,500,000) ($31,000,000) ($8,000,000) ($15,500,000) ($4,000,000) ($19,500,000)
$3,356,000 $1,529,000 $600,000 $600,000 $0 $600,0004,187,000 4,634,000 180,000 0 0 05,172,000 4,634,000 538,000 0 0 05,962,000 4,634,000 1,200,000 128,000 0 128,0006,133,000 4,634,000 ($1,750,000) 1,200,000 2,049,000 0 2,049,0006,183,000 4,634,000 140,000 1,200,000 209,000 0 209,0006,229,000 4,634,000 140,000 1,200,000 255,000 0 255,0006,408,000 4,634,000 140,000 1,200,000 434,000 0 434,0006,592,000 4,634,000 140,000 1,200,000 618,000 0 618,000
82,887,444 13,994,000 1,790,000 37,264,296 11,207,000 18,632,148 29,839,148
11.0% 8.9% 7.0% 22.2% 0.0% 16.6% 6.2%
NICIL Investment
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
M.A. Angeliades Inc. has been selected via a tender process to be the Supervision Firm on this project to oversee the construction of the hotel and entertainment complex. M.A. Angeliades provides high-quality construction management and design services to the construction industry in the New York tri-state area. Some of the major projects they have concluded include:
Sycamore Court Apartments: New 7 Story 125,000sf, 63 Unit Condominium building including 400000sf of commercial and community space, together with 88 indoor parking spaces valued at US$35Million
Bleecker Street, Broadway-Lafayette Complex- Complete rehabilitation of the Bleecker Street IRT Station and creation of a new connection. The work included modifications/ reinforcement of steel and concrete structures, underpinning adjacent buildings, pile driving to provide support for the temporary decking systems and major utility relocations required at street and station platform levels valued at US$94,444,000
Tax concessions issued by the GOG/GO-Invest
A tax agreement has been executed with the Government of Guyana to provide the following tax benefits for the Project:
1. A 10 year waiver on corporate, property and withholding taxes which will commence from the first year of commercial operations.
2. Relief from import duty, VAT, excise tax (if applicable), and any other import fees, taxes, duties on machinery, equipment, building and other materials, fixtures and fittings and furnishings (including linen, utensils, accessories, etc) and non-luxury vehicles required by the developers for the construction only of the Project. The concession does not cover food and drinks which includes alcohol.
During operations relief will be granted from duty and excise tax on capital repairs or replacements greater that US10,000 in value and one retrofitting exercise within 10 years of operations.
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
AHI is 100 % owned by NICIL. Once a private investor invests US$8 M in the project equity, AHI will be diluted to 33.3 %. The company has up to date audited accounts to end 2011.
ATLANTIC HOTEL, INC. STATEMENT OF FINANCIAL POSITION
(Wholly owned subsisiary of National Industrial & Commercial Investments Ltd.)
Notes 2012 2011 2010ASSETS G$ G$ G$Non-current assetsFixed assets - Work in Progress 5. 2,036,724,516 2,036,724,516 -
Current assetsAccounts receivable - NICIL - - 1,000,000 Bank 1,863,875,484 75,484 -
1,863,875,484 75,484 1,000,000
TOTAL ASSETS 3,900,600,000 2,036,800,000 1,000,000
EQUITY AND LIABILITIESCapital and reservesShare Capital 3. 1,000,000 1,000,000 1,000,000 Deposit on shares 799,000,000 Retained earnings - - -
800,000,000 1,000,000 1,000,000
Long-term LiabilitiesSubordinated Loan Stock 3,100,600,000 2,035,800,000 - Other creditors - -
3,100,600,000 2,035,800,000 -
TOTAL EQUITY AND LIABILITIES 3,900,600,000 2,036,800,000 1,000,000
ATLANTIC HOTEL INC.
STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2012
Financial Summary of AHI as of Nov 2012
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
2009—Public Private Partnership advertisement
As per the attached advertisement, parties were invited to participate in the project. In June 2010, Marriott announced that it had executed agreements with AHI, a company owned by NICIL that will be the basis of a public-private partnership.
REQUEST FOR EXPRESSIONS OF INTEREST
Public Advertisements and Transparency in the Pursuit of the Project
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
MARRIOTT NOTICE
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
2010—Advertisement for Pre-Qualification A request for Expressions of Interest for qualified contractors was publicly advertised, both internationally and locally, between June – July 2010. Twenty three (23) firms submitted Expressions of Interests (EOI) for consideration to be shortlisted for the construction of the hotel and the entertainment complex. After an evaluation of the 23 submitted EOIs against the prescribed pre-qualifying criteria, 7 shortlisted firms were invited from January 23, 2011 to submit a proposal for the construction of the hotel and entertainment complex based on a previously conceptualized design. Bidders were given the option of bidding on this preconceived design or to submit an alternative design that will meet the Marriott standards, AHI’s requirements and be capable of LEED certification. Tenders closed on May 3, 2011 at 2pm with submissions being publicly opened at the Office of NICIL and in the presence of a representative of the Auditor General’s office. Two (2) bids/proposals were received from the 7 shortlisted prequalified contractors. Following the receipt of higher than expected prices, these two firms were asked to retender with a design-build concept, while maintaining the functional requirements previously approved by Marriott. Shanghai Construction Group was selected as being the contractor with the most attractive proposal based on price. The project is expected to have a twenty four- month construction period from the start of construction.
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
NOTICE FOR PRE-QUALIFICATION OF CONTRACTORS
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
2012—Advertisement for Supervision Firm
A Request for Proposals for Construction Supervision for the Marriott Hotel, Guyana, Georgetown project was publicly tendered starting February 17th 2012 and closed March 9th 2012. The closing date was extended to March 16th 2012 at 2pm and opened at the NICIL office in the presence of representatives from the Auditor General’s office. Two proposals were received as follows:
M. A. Angeliades Inc.--US$1,068,000.00
CEMCO Consultants Inc.--US$1,614,000.00
AHI has signed a contract with M.A. Angeliades who is a New York based firm with over 5 years of experience in both USA and the Caribbean. M.A. Angeliades has been involved in the construction/renovation/extension of over 200 high-end restaurants in the New York Metropolitan Area as this was their initial area of specialty before becoming a general contractor. Other hospitality projects completed by the Construction Manager but as a contractor include the Haven at the Beacon situated on the Fishskill River in Beacon, New York and the Expansion and Redevelopment of New Sam Lords Castle, Barbados.
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
REQUEST FOR PROPOSALS
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
FINAL CALL FOR EXPRESSIONS OF INTEREST
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
2012— Advertisement for operators (following page) for the operation for each of the 3 components of the Entertainment Complex (casino, nightclub, and restaurant).
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
ADVERTISEMENT FOR OPERATORS
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
In March 2012, Government, in response to a question from the Opposition, provided details on the Project to the National Assembly along with copies of the relevant contracts executed to date.
An invitation was also extended by Government to the members of the Opposition to make a close door presentation on additional details pertaining to the Project. These details are restricted by contractual terms of confidentiality between the private parties involved. To date this invitation has not been accepted.
Government remains willing to conduct this presentation where details of the Feasibility Study and the Marriott contracts can be shared.
PROJECT RENDERING
Other Communication on the Project
September-2012 Overview of Project, as provided by Client Proposed Marriott Hotel and Entertainment Complex – Kingston, Georgetown, Republic of Guyana
1. Financial Projections are extremely conservative; 2. Full support of GOG via investment and other support; GOG is placing 1/3 of
funding that will rank below debt and private equity, in terms of return; 3. Excellent location overlooking sea and river, being sold into project a
discounted rate; plus additional sea-front being areas leased for 99 years; 4. Excellent hotel brand that will seek to assure quality on both the design review
and the product once project goes commercial; additionally, there will be a competent supervision firm during construction; first new major hotel brand in 40 years-- no known hotel brand currently exists in Guyana;
5. Maximum tax incentives (including a 10 yr. tax holiday) that cover the entire project including the Entertainment complex
6. Entertainment complex and concrete board walk, will combine with the hotel to be a Mecca for traffic.
7. Casino licenses are limited by regions with this being only the second one of three to be issued.
8. Considerable space for future expansion that can accrue to the project company; e.g. luxury condominiums, expansion of the entertainment complex, shopping space (will require parking in ground level and a parking garage);
9. Guyana is witnessing a rapidly expanding economy and both business and tourism traffic are on the rise;
Contractor and design firm both possess major international experience (including regional experience) that has built many hotels, including many branded hotels.
Why This Project Makes Sense