tangerine concept final landmark

TANGERINE HOTELS

Brainwave Management

Services

November 2010

Executive Summary

Confidential Information3

Tangerine Hotels

Executive Summary

An experienced Hospitality Management Team is looking to implement their concept of Luxury Hotel

Apartments in India

Tangerine will be competing in the 4 Star Hotel / Residential space with Luxury Hotel Apartments concept

The Team is looking at investment to take live the new concept in Indian Hospitality

Concept Introduction


Tangerine Hotels


Tangerine will be competing in the 4 Star Hotel Apartments/ Luxury Residential Space concept

The idea is to offer people a residential-style apartment with hotel-like amenities fulfilling clients Lifestyle

and Living needs

Apartment hotels fill up huge gap that exists for business travelers, family travelers and large groups which

hotels are not able to offer

Tangerine services Lifestyle and Living needs of business clientele and residential families through

infrastructure, service, speed and price structure

Target age group will be 25-50 with good disposable income, and limited leisure time

Amenities of an ultramodern Hotel with the comfort of Home


Tangerine Hotels


Homely atmosphere compared to a conventional hotel room

Facilities include Bedroom, Dining, Kitchen in the room

Hotel facilities include 24hour room service, housekeeping, laundry, security, doctor on call, salon & spa,

supermarket, conference rooms, ball room, swimming pool, fitness center and full fledged F&B services

Concept is aimed at Expatriate and Corporate executives, NRIs who come with their families, and medical

tourists

A Home with Top Business & Recreation Facilities


Tangerine Hotels


Focus on Luxury Lifestyle Apartments for Long & Short stays

60-100 rooms, 4 star category with Food & Beverages element

1 Coffee shop / All Day Dining

1 Lounge Bar / Specialty Restaurant

Conference & Banquet Facility

1 Board Room / 2 Meeting Rooms

1 Ball Room

1 Rooftop Concept Bar (concept bar at night)

Pool area, preferable covered

Open spaces, Gym, Recreation & Play area for kids

Supermarket

Salon & Spa


Tangerine Hotels

Design

Modern, Trendy, Chic & Cool

Touch of Finesse

Elements of nature blended in, fresh Flavors & Fragrances


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Target Market

Tourists

Western Expats

Working Professionals in the age group of 25-50 years

Corporate & Business House

Families


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Rooms

Studio

1 Bedroom

2 Bedrooms

Rooms will have cable TV, Internet access, room service & housekeeping facilities & laundry services

Cooking mini kitchens/utensils/plates/glasses & cutlery/chinaware

All rooms will have a terrace or balcony

Food & Beverages


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All Day Dining

o 80 covers

o Should give a feel of Home Kitchen

o 45 covers indoor & 35 covers outdoor /terrace / patio with a roof

o Breakfast, Lunch, Dinner


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Specialty Restaurant

o International Cuisine

o 60covers

o 20 covers Bar


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Pool Bar

o 40 covers

o 60 Sun Lounges

o Same level as coffee shop


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Rooftop Bar / Lounge (with covered roof)

o Sheesha, Mezze & Tapas

o 80-100 covers

o Party place including events, promotions

Facilities


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Board Rooms / Meeting Rooms

o 15 covers, all round table for Board Room

o 80 covers called Senate I & Senate II for Meeting Rooms


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Ball Room

o 400 covers

o 3 doors with pre function area


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Other Facilities (Optional & Location dependent)

Essentials Supermarket

o Supermarket in every Hotel

o Could follow outsourced business model

Salon & Spa

o Could follow strategic / outsourced business model

Laundry Services called “Laundromat”

Fitness Center

Travel Desk

Concept Positioning & Marketing


Tangerine Hotels

Positioning of Tangerine

Tangerine will be competing in the market void set between 4 star and 5 star with luxury hotel apartments

The brand will be positioned to be the number one choice for tourism and corporate sectors of India for

Lifestyle and Living needs based on service, speed and price structure

The hotel will cater to leisure guests, business clientele and residential families

The concept and brand is attractive and affordable to people from different walks of life

The brand will be launched in the most upcoming and growing cities catering primarily to families and

corporate sectors with main clientele being between 25-50 with limited time to enjoy a lifestyle


Tangerine Hotels

Marketing & Promotion

Press Conferences & Promotional Campaign

Discount Vouchers

Entertainer Vouchers

“Biggest Party in Town” campaigns

Fashion shows and Entertainment shows in tie-ups with fashion & entertainment companies in India and

from outside

Print Media- Lifestyle & Business magazines, F&B publication, Newspapers

Outdoor Campaigns

Cable TV, Radio and Satellite

Internet Marketing

Development and Expansion Plans


Tangerine Hotels

Development & Expansion Plans

The Management Team is looking at the metros in India for hotel development

Expansion plans will include Tier II cities with growth potential

Target markets include Mumbai, NCR , Chennai, Bangalore, Hyderabad, Ahmadabad, Pune, Kolkatta

Cities with growing GDP & business potential will be targeted first

Land / Real Estate (ready infrastructure) model used will be acquisition, lease or JV

The Team is looking at 5 hotels in the first 3 years

Indian Hotel Industry


Tangerine Hotels

Indian Hotel Industry

The Indian travel & tourism is ranked 5th in the long-term (10-year) growth

It is ranked the 14th best tourist destination in the world

Country Brand Index survey conducted by Future Brand puts India as “the best country brand for value-

for-money”

India is counted among the rising stars that are likely to become major tourist destinations in the next five

years


Tangerine Hotels

Road ahead for the Indian Hotel Industry

The demand for travel & tourism in India is expected to grow at healthy rate of 8% for the next 5-7 years

placing India at the 3rd position in the world

India is forecasted to become the fifth fastest growing business travel destination between 2010-2019

India’s travel & tourism sector is expected to be second largest employer in the world; providing jobs to

more than 40 million by 2019

This will attract FDI, global brands and new concepts into the Indian hospitality space


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Low Phase to Growth Phase

The financial year 2008-2009 was not a very good year for the Indian Hotel Industry with Mumbai Terror

attacks and global economic slowdown

This resulted in overall decline in occupancy and revenue per available room

But the mood is upswing trend again in 2010 with global economy slowing moving out of recession and

India’s own growth story looking good again

Study of 6 big hotel groups in India shows expected revenue growth of 22%-25% till 2012

HVS Hospitality Services does see an opportunity in this weak period by describing this as “The best time

to make investments in hotel sector”

Today’s Low Phase seems the best investment opportunity to take advantage of the coming Growth Phase


Tangerine Hotels

Low Phase to Growth Phase

2010 is expected to see an increase in Revenue Per Available Room and Occupancy rates compared to

2009

Reserve Bank of India has recently has removed hotel industry from Commercial Real Estate

classification. This will ensure easier bank lending on much lesser rates as compared to earlier

The Government policies are expected to be more favorable

The domestic market has shown huge potential and continues to support the growing tourism industry

Many international hotel brands are keen to have a presence in India to include emerging market in their

portfolio to offset losses from mature markets

Government Policies and Domestic Market potential are expected to push Indian Hotel Industry again to Growth Phase


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Growth in Hotel Rooms

Indian Hotel rooms are expected to be nearly double by 2014 compared to 2009 ; indicating high growth

23,185

48,475

94,115

10,000

25,000

40,000

55,000

70,000

85,000

100,000

1998-1999 2008-2009 2013-2014

No of Rooms


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Occupancy Rate for Indian Hotel Industry

Indian Hotels enjoy a healthy occupancy rate of 62% ; expected to maintain an increasing trend over the next few years

0.0%

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Avg 62.2%


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RevPAR for Indian Hotel Industry (in INR)

Indian Hotel Industry expects RevPAR to touch the 2006-2007 figures again in 2010-2011 on account of global economy revival and domestic business growth

0

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RevPAR has recently seen a drop

due to terror attacks and

slowdown of global economy

The industry is bracing for growth

phase from 2010 onwards; which

is expected to show higher

RevPAR

Avg INR 3004


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RevPAR numbers based on hotel status

0

1000

2000

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7000

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9000

1995

-96

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Five Star Deluxe Five Star Four Star Three Star


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Occupancy Rate numbers based on hotel status

35.0%

45.0%

55.0%

65.0%

75.0%

85.0%

1995-96

1996-97

1997-98

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

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2008-09

Five Star Deluxe Five Star Four Star Three Star


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Financial Aspects of the Hotel Industry

A financial analysis was done on India’s 6 big hotels

The goal was the analyze the coming years in terms of growth revenue and P/E valuation

Hotels studied were

Indian Hotels Company,

EIH (Oberoi Group of Hotels),

Hotel Leela,

Taj GVK Hotels,

Kamat Hotels and

Royal Orchid


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Average Revenue Growth

17.9%

-9.1%

12.8%

22.0%

26.6%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

2007-08 2008-09 2009-10 2010-11 2011-12

The Industry is forecasting strong Revenue Growth


Tangerine Hotels

Average P/E valuation

22.7x

32.5x

24.6x

15.9x

-

5.0x

10.0x

15.0x

20.0x

25.0x

30.0x

35.0x

2008-09 2009-10 2010-11 2011-12

The Industry expects favorable valuation in the coming years

Indian Hospitality Industry Trends


Tangerine Hotels

Indian Economy

Indian economy is expected to grow at projected GDP of more than 7% when other countries are

struggling to come out of negative growth

India’s resilient economy was only marginally affected by the global financial crisis

Exponential service sector growth with emergence of BPO, Telecom and other sectors

Indian younger demographics is the right fit for global business audience

India’s exponential FDI growth likely to continue- last 3 years (2007-2009) has seen $90 billion

The Indian Elephant is dancing on growth stories


Tangerine Hotels

Indian Hotel Market

The Indian Hotel Market has been growing from the days of 1990s when the handful of major hotel market

were limited to the big cities

Recent years have seen emergence of secondary and tertiary cities also

Infrastructure in Indian cities & towns have been continuously improved

India as a Brand has also been well accepted globally

There has been development of niche tourism like medical tourism, religious circuits, adventure tourism

Emergence of secondary cities has led to increase in hotel development activities; providing new expansion avenues


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Hotel Brand Growth in India

There is a growing perception of Indian markets as a lucrative opportunity among international brands

Last few years have seen entry of major international brands in India and growth of Indian brands

Also expected is emergence of branded budget and economy hotels

Educated and well exposed Indian audience are likely to accept global brands and new concepts

Growth of the Indian middle class offering a large consumer base of more than 1 billion people

Indian and International Hotel Brands are being well accepted by growing Indian Middle Class


Tangerine Hotels

The M.I.C.E. Business Opportunity in India

Meetings, Incentive, Conventions, and Exhibitions business is a key contributor to overall hospitality

industry; accounting for 20% of all international arrivals worldwide.

Indian has seen growth of Science & Technology related industries like biotechnology and

pharmaceuticals that host large conference

Growth of the manufacturing sector

Increased interest in India as a travel-worthy destination

Expected emergence of dedicated convention centers in more cities

Successful and replicable model in Hyderabad International Convention Centre

Indian Hospitality Industry needs to make several strides towards developing MICE facilities


Tangerine Hotels

Hotel Development Costs

Hotel Development costs in India are expected to be rationalized due to market maturity and economic

conditions

Experts forecasts further rationalization of per key development costs with entry of brands across all

positioning

Industry is looking at favorable Government policies w.r.t license process

Current trend of building hotels is expected to shift to buying hotels once cost rationalization is seen in the market

Positioning

Luxury

Upper Upscale

Upscale

Mid Market

Budget

Economy

Typical development cost per key (INR millions)

12.5 and above

6 to 8.5

3.5 to 5.5

2.5 to 3.5

2.5 and below

8.5 to 12.5


Tangerine Hotels

Financial Aspects of the Hotel Industry

Industry has been lobbying for infrastructure status for the hotel industry. The Government is expected to

come out with favorable policy

This change in industry status will increase possibility of debt at reasonable rates; thus ensuring financial

maturity for the market

Industry is expecting more involvement of Private Equity and Hospitality Funds in the near future

This will bring about rise in sale /purchase of hospitality assets

Financial maturity will also bring in rationalization of valuations

The Indian Hospitality Industry is forecasting Financial Maturity with favorable policies and entry of financial institutions


Tangerine Hotels

Food and Beverages (F&B) Concepts

Recent years have seen rapid growth of standalone restaurants

Well traveled customer is open to different dining experiences

Entry of restaurant focused investors

The F&B space is looking at impetus from Government in form of ease of acquiring licenses

Indian F&B industry is in for some exciting and great times ahead

Management Team


Tangerine Hotels

Management Team

Management

Mr. Ashwin D’Cunha ; Managing Director

Mrs. Snigdha Banerjee D’Cunha ; Director Operations & actively involved in Food & Beverages

Mr. Shivraj Johar ; Business Head Hospitality

Mr. Sameer Despande ; Operations Manager and actively involved in Rooms Division

Mr. Rahul Kotyan ; Food & Beverages

Mr. Shaik Mohammad Sultan ; Corporate Chef

Origami / Bloombox ; Sales & Marketing

Advisors

Mr. Praveen Roy

Mr. Aldrin D’Cunha


Tangerine Hotels

Ashwin D’Cunha ; Managing Director

17 years experience in Food & Beverages, Project Management and Hotel operations across the globe

Worked with President Hotel, India; Carnival Cruise Lines, Miami, USA ; Atlas Hospitality Group, Dubai;

One & Only One Royal Mirage, Dubai; The Embassy Club, Dubai; Rendezvous Restaurants, India;

Bombay Palace Group of Restaurants, New York, USA

Type of Projects handled :

Management of Hotel and Food & Beverages operations

Human Resources- training & recruitment

Sales & Marketing planning for Hotels and Restaurants

Concept & Design Planning

Financial Planning for Hotels & Restaurants

Pre-Opening and Opening Project Management

Education

Honors student in PG Hotel Management Course from KC College, Mumbai India

Honors student in Food Production & Patisserie from IHM, Mumbai

Honors from “All Star Bartenders & Mixologist”, New York.

Honors from WSET UK; Wine and Spirit Advanced Education


Tangerine Hotels


Major Projects

Pre-Opening and Post Opening Management of 3 hotels over 5 years for “One & Only Royal Mirage

Resort”- among the 10 best resorts in the world as declared by Conde Nast Traveler

Pre-Opening of Bombay Palace Restaurants in New York City, USA

Opened the “Embassy Club London” in Abu Dhabi – an enterprise of Mark Fuller & Andy Taylor (Co-

Manager of Iron Maiden, The Rock Group)

Started an entire vertical of Food & Beverage and Hotel Apartments for Elite Hospitality, Bahrain

Opened Dubai’s first Arabesque with 3 level concepts- sports bar, main dance & VIP bar

Concept of Nina, Dubai’s first Indo Euro Restaurant and Rooftop Lounge & Open Sky Bar

Concept, Design and Operations for “Food & Beverages” – a retail, lifestyle, dining & entertainment

venue in Bangalore

Concept and recruitment for Southern Sun, a Retail & 5 Star Hospitality venue in Dubai

Pre-Opening and Post-Opening Operations of 2 mega liners for Carnival Cruise Liners, Miami, USA


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One & Only Royal Mirage , Dubai

Elite Hospitality , Bahrain

Bombay Palace , New York

Among the 10 Best Resorts in the World

Embassy Club, Abu Dhabi


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Snigdha Banerjee ; Director Operations

14 years experience in Food & Beverages, Project Management and Hotel operations across the globe

Worked with Taj Group of Hotels, UEI Global Hotel Education


Management of Food & Beverages operations

Human Resources- training & recruitment

Planning & Holding Events such as fashion shows, music album launches, product launch

Concept Planning

Pre-Opening and Opening Project Management

Set Up and Operations in India for UEI Global Hotel Education for Berggruen Group, USA

Education

Honors in Hotel Management from Indian Institute of Hotel Management (IIHM) by Taj Hotels India

Total Quality Management from Indian Institute of Hotel Management (IIHM) by Taj Hotels India


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Major Projects

Pre-Opening and Post Opening Management of restaurants for “One & Only Royal Mirage Resort”-

among the 10 best resorts in the world as declared by Conde Nast Traveler

Set Up and Operations in India for UEI Global Hotel Education for Berggruen Group, USA

Restaurant Manager with The Taj Group of Hotels, India

Human Resources solutions for Southern Sun Hotel, Dubai


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One & Only Royal Mirage , DubaiTaj Group of Hotels , India UEI Global Education India

Among the 10 Best Resorts in the World


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Shivraj Johar ; Business Head

19 years experience in Food & Beverages industry spread across Luxury Hotels, Banqueting and

Restaurant Chains

Worked in Taj Group of Hotels for over 10 years in India and Maldives; Mayfair Celebrations – Gravis

Hospitality, India; Jones Lang LaSalle, India


Pre-Opening and Operation of large Food & Beverages operations

Operations and Business Development of 5 Star Hotels

Restaurant Operations

Education

Diploma in Hotel Management, Catering Technology & Applied Nutrition from Institute of Hotel

Management Chennai


Tangerine Hotels


Major Projects

Opened and Operated Taj Hotel in Maldives

Part of the Food & Beverages Team to launch Taj Residency in Vishakhapatnam

Operations for Mayfair Celebrations (Gaylord Restaurant) across North India

Handled Integrated Facilities Business Line for Jones Lang LaSalle, India


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Taj Resort Maldives Gaylord Restaurant, New Delhi

Taj Residency, Vishakhapatnam


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Sameer Deshpande ; Operations Manager

15 years experience in Hospitality Operations and Management

Worked with Elite Group, Bahrain; Palms Hotel, India ; Sahara India Parivar, India; & Sahil Resorts, India


Day to Day operations of a hotel

Maintaining service standards

Pre-Opening Management

Team Building

Inspection & Compliances

Quality Control

Budgeting and Manpower planning to make operations cost effective and in line with business goals

Education

Bachelors in Hotel Management from The Presidency College Of Hotel Management, India


Tangerine Hotels


Major Projects

Operations Manager for Apartment Hotel of Elite Hospitality with 298 rooms in Bahrain

Pre-Opening and Opening of Sahil Sarovar Hotel in Lonvala, India

Concept and Planning for Radisson Spa & Resort, Alibaug

Conceptualization and Pre-Opening for 6 multi-cuisine restaurants at Amby Valley Sahara Lake City


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Elite Hospitality , Bahrain

Radission Resorts & Spa, Alibaug

Sarovar Hotel & Amby Valley , Lonvala


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Rahul Kotyan ; Food & Beverages

14 years of experience in Food & Beverages operations within Hotels, Multi-unit Restaurant operations

and Pre-Opening & Project Startups

Worked with Taj Group; Ramee Group of Hotels; Flora Hotels, Dubai; MARS Restaurant, India and

Lite Bite Foods, India

Type of Projects handled:

Heading Food & Beverages operations including Restaurants, Banquets, Conferences, Catering

Pre-Opening project operations

Menu Planning

Vendor and Product Sourcing

Team recruitment and training

Formulating standards and procedures

Education

Advanced Diploma in Hospitality Management from Australian College of Travel & Hospitality

Management, Melbourne.

Diploma in Hotel Management, Catering & Nutrition from Institute of Hotel Management, Catering and

Nutrition, Ahmedabad


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Rahul Kotyan ; Corporate Head Food & Beverages

Major Projects

Mumbai Operations for Lite Bite Foods with responsibilities including branding, operations, feasibility

evaluation, recruitment & training, setting up systems, vendor handling

Handling Food & Beverages operations for 2 hotel apartments of Flora Hotels, Dubai

Pre-Opening and Operations of 7 restaurants at Ramee Royal Hotel, Dubai

Operations of 4 restaurants, nightclub and 24 hour room service with a team of 76 at Gordon House

Mumbai & Pune

Pre-Opening of Masala Bay restaurant at Taj Land’s End, Mumbai


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Rahul Kotyan ; Food & Beverages

Flora Park Hotel, Dubai

Ramee Hotel, Dubai

Masala Bay Restaurant, Taj Land’s End, Mumbai


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Shaik Mohammad Sultan ; Corporate Chef

Culinary professional with more than 20 years of experience in industry and academia

Worked with Taj Group of Hotels, Elite Group Bahrain, Shri Shakti College of Management and

Osmania University

Type of Projects handled:

Oversee Food & Beverages operations

Selection, Planning, Requisitioning for supplies and approval of Standard of Supplies

Coordinate the Planning of menus like-, Daily Buffets, Theme menus for banquets & food festivals

Controlling of all operational costs; food, labor and materials

Banquet Kitchen and Conference Operations standardization

Designing of facilities requirements in coordination & consultation with the builder, equipment

manufacturers and suppliers

Education

Diploma in Hotel Management from Institute of Hotel Management, Catering Technology & Applied

Nutrition, Hyderabad


Tangerine Hotels


Major Projects

Setting up 2 Hotel properties’ kitchen operations from ground zero in tandem with requirements on its

catering role, budgets and desired business returns at the Elite Group, Bahrain

Sous Chef for Majorda Beach Resort, Goa, India

Chef De Partie at Taj Banjara, Hyderabad, India

Faculty; Food Production at Shri Shakti College of Management and Osmania University, Hyderabad


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Elite Resort & Spa , Bahrain

Majorda Resort & Spa, Goa

Taj Banjara, Hyderabad


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Origami / Bloombox ; Sales & Marketing (optional)

25 years experience in Hospitality Sales & Marketing

Worked for various projects of Hospitality Groups, Carmasutra, Gsport, Rogue Beer


Sales & Marketing Strategy

Brand Standards and Corporate Brand Development

Developing and Controlling Marketing and Advertising budgets

Database management & CRM

Public Relations, Media Buying, Media Relations, Road shows with major international property

developers

Strategic & Promotional Tie-ups


Tangerine Hotels

Praveen Roy ; Advisor

25+ years stalwart of Indian Hospitality Industry

He has set up various hospitality projects across India and Internationally

Work experience includes Taj Group of Hotels for over 18 years and successful creation of Indian Institute

of Hotel Management (IIHM)

Dean of IIHM and General Manager of the Taj Hotel

Setup of UEI Global Hotel Education in India for Berggruen Group, USA

Currently assisting Restructuring of Baisan Hospitality Institute and Hotels in Bahrain

Aldrin D’Cunha ; Advisor

A Visionary & Guiding Force for the team

An Advertising & Media expert

Setup Brainwave Advertising in Dubai and holds worldwide royalty for Qatar Yellow Pages

Member of Launch Team of Tata Yellow Pages in Mumbai

An Entrepreneurial and Business mindset

Financials


Tangerine Hotels

Financial Assumptions for a 80 room 4 Star Hotel with Luxury Apartments

Starting with 80 rooms 4 Star Hotel with luxury Apartments as 1) Land buyout & 2) Land Lease

Costs – Land Buyout

Total project costs with land, license, development and working capital Rs.101.80 crores

Development costs per room is ~ Rs.80 lacs ($0.2 m) including F&B and other facilities

Land cost for ~ 4 acres is ~ Rs.30 crores ($6.7m)(land appreciation at 25% every year)

Working capital required of ~ Rs.3.8 crores($0.85m) including management expenses

License fees of Rs.5 crores ($1.2m) (assumed to be sold for Rs.5 crores during exit)

Pre-opening costs including salary of employees/management accounted for

Financials

Equity: Debt ratio at 50:50

Debt paid over 10 years with 1 year moratorium

Bank interest rate at 12%

Corporate Tax at 33.5%


Tangerine Hotels

Financial Assumptions

Operations

Average revenue per room & Occupancy Rate lowest during monsoon quarter and higher during year end

quarter

Average occupancy assumed at 67% over 7 years

Average RevPar over 7 years comes to Rs.6850 per room ($152)

Revenue from F&B to be at an average of 29% of room revenue (below current levels of 35%-40% seen in

other hotels)

Other revenue includes facilities such as spa, salon, laundromat, supermarket, traveling, etc


Tangerine Hotels

Source & Use of Funds (INR lacs)

Sources of Funds

Amount % of Total

Credit Facility 0.0 0%

Debt 5,090.0 50%

Equity 5,090.0 50%

10,180.0 100%

Use of Funds

Amount % of Total

Hotel 9,800.0 96.3%

Working Capital 380.0 3.7%

Transaction Fees 0.0 0.0%

Other 0.0 0.0%

10,180.0 100.0%


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P&L Statement (INR lacs)

No of roomsAverage Occupancy Rate

Average Revenue per Room

RevPAR

Room Revenue

% of Total Revenue

F&B Revenue

% of Total Revenue

Total Revenue

Growth

EBITDA

% margin

Net income

% margin

Year I Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

80 80 80 80 80 80 80

63.8% 63.8% 68.8% 68.8% 68.8% 68.8% 68.8%

7,250 8,700 9,570 10,527 11,053 11,606 12,186

4,622 5,546 6,579 7,237 7,599 7,979 8,378

991.8 1,611.4 1,910.3 2,101.3 2,206.4 2,316.7 2,432.6

68.7% 71.3% 71.5% 72.5% 73.0% 73.5% 74.0%

342.0 495.7 588.1 617.5 632.9 648.7 664.9

23.7% 21.9% 22.0% 21.3% 21.0% 20.6% 20.2%

1,443.2 2,261.3 2,673.0 2,896.9 3,021.0 3,150.8 3,286.5

56.7% 18.2% 8.4% 4.3% 4.3% 4.3%

794.9 1,296.7 1,544.8 1,683.4 1,753.4 1,826.6 1,903.2

55.1% 57.3% 57.8% 58.1% 58.0% 58.0% 57.9%

(93.7) 264.3 455.1 578.1 658.7 751.4 798.6

-6.5% 11.7% 17.0% 20.0% 21.8% 23.8% 24.3%


Tangerine Hotels

Debt Payment Ability(INR lacs)


5,090.0 4,901.5 4,713.0 4,524.4 4,335.9 4,147.4 3,958.9

610.8 596.7 574.0 551.4 528.8 506.2 517.5

6.4x 3.8x 3.1x 2.7x 2.5x 2.3x 2.1x

1.3x 2.2x 2.7x 3.1x 3.3x 3.6x 3.7x

Debt

Interest expense

Debt / EBITDA

EBITDA/ Interest


Tangerine Hotels

Exit Return with Enterprise Value @3.5x of revenue (INR lacs)

Plus Cash

Plus Working Capital

Less Credit Facility

Less Senior Debt

Plus: License

Net Equity Value

Hotel IRR

Payback multiple

Total IRR

Payback multiple

Total Enterprise Value


5,051.3 7,914.6 9,355.5 10,139.2 10,573.5 11,027.7 11,502.9

NA 30% 36% 34% 30% 27% 25%

0.4x 1.7x 2.5x 3.2x 3.7x 4.2x 4.8x

-11% 27% 30% 29% 27% 26% 25%

0.9x 1.6x 2.2x 2.7x 3.3x 4.0x 4.8x

89.1 399.3 885.2 1,533.3 2,288.3 3,097.9 4,067.4

433.4 514.1 609.8 666.1 696.4 598.7 522.2

0.0 0.0 0.0 0.0 0.0 0.0 0.0

5,090.0 4,901.5 4,713.0 4,524.4 4,335.9 4,147.4 3,958.9

500.0 500.0 500.0 500.0 500.0 500.0 500.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0

983.9 4,426.4 6,637.5 8,314.3 9,722.3 11,076.9 12,633.5


Tangerine Hotels

Financial Assumptions for a 80 room 4 Star Hotel with Luxury Apartments

Starting with 80 rooms 4 Star Hotel with luxury Apartments as 1) Land buyout & 2) Land Lease

Costs – Land Lease

Total project costs with land lease, license, development and working capital Rs.101.80 crores (78 crores

?)

Development costs per room is ~ Rs.80 lacs ($0.2 m) including F&B and other facilities

Land Lease ~ 4 acres is ~ Rs.4 crores ($0.89m) (deposit of 5 crores ($1.2m) to be replaced during exit)

Working capital required of ~ Rs.5 crores ($1.2m) including management expenses

License fees of Rs.5 crores ($1.2) (assumed to be sold for Rs.5 crores during exit)

Pre-opening costs including salary of employees/management accounted for

Financials

Equity: Debt ratio at 50:50

Debt paid over 10 years with 1 year moratorium

Bank interest rate at 12%

Corporate Tax at 33.5%


Tangerine Hotels

Financial Assumptions

Operations

Average revenue per room & Occupancy Rate lowest during monsoon quarter and higher during year end

quarter

Average occupancy assumed at 67% over 7 years

Average RevPar over 7 years comes to Rs.6850 per room ($152)

Revenue from F&B to be at an average of 29% of room revenue (below current levels of 35%-40% seen in

other hotels)

Other revenue includes facilities such as spa, salon, laundromat, supermarket, traveling, etc


Tangerine Hotels

Source & Use of Funds (INR lacs)

Sources of Funds

Amount % of Total


Debt 3,900.0 50%

Equity 3,900.0 50%

7,800.0 100%

Use of Funds

Amount % of Total

Hotel 7,300.0 93.6%



Other 0.0 0.0%

7,800.0 100.0%


Tangerine Hotels

P&L Statement (INR lacs)



RevPAR

Room Revenue

% of Total Revenue

F&B Revenue

% of Total Revenue

Total Revenue

Growth

EBITDA

% margin

Net income

% margin


80 80 80 80 80 80 80

63.8% 63.8% 68.8% 68.8% 68.8% 68.8% 68.8%

7,250 8,700 9,570 10,527 11,053 11,606 12,186

4,622 5,546 6,579 7,237 7,599 7,979 8,378

991.8 1,611.4 1,910.3 2,101.3 2,206.4 2,316.7 2,432.6

68.7% 71.3% 71.5% 72.5% 73.0% 73.5% 74.0%

342.0 495.7 588.1 617.5 632.9 648.7 664.9

23.7% 21.9% 22.0% 21.3% 21.0% 20.6% 20.2%

1,443.2 2,261.3 2,673.0 2,896.9 3,021.0 3,150.8 3,286.5

56.7% 18.2% 8.4% 4.3% 4.3% 4.3%

394.9 876.7 1,103.8 1,220.3 1,267.2 1,316.1 1,367.1

27.4% 38.8% 41.3% 42.1% 41.9% 41.8% 41.6%

(322.1) 59.3 243.1 343.2 399.7 463.8 495.6

-22.3% 2.6% 9.1% 11.8% 13.2% 14.7% 15.1%


Tangerine Hotels

Debt Payment Ability(INR lacs)

Debt

Interest expense

Debt / EBITDA

EBITDA/ Interest


3,900.0 3,755.6 3,611.1 3,466.7 3,322.2 3,177.8 3,033.3

468.0 457.2 439.8 422.5 405.2 387.8 396.5

9.9x 4.3x 3.3x 2.8x 2.6x 2.4x 2.2x

0.8x 1.9x 2.5x 2.9x 3.1x 3.4x 3.4x


Tangerine Hotels

Exit Return with Enterprise Value @3.5x of revenue (INR lacs)

Plus Cash



Less Senior Debt

Plus: License

Net Equity Value

Hotel IRR

Payback multiple



5,051.3 7,914.6 9,355.5 10,139.2 10,573.5 11,027.7 11,502.9

30.1 181.7 502.3 962.4 1,505.3 2,084.9 2,773.4

384.1 462.3 555.4 609.1 636.4 535.8 459.2

0.0 0.0 0.0 0.0 0.0 0.0 0.0

3,900.0 3,755.6 3,611.1 3,466.7 3,322.2 3,177.8 3,033.3

500.0 500.0 500.0 500.0 500.0 500.0 500.0

500.0 500.0 500.0 500.0 500.0 500.0 500.0

2,565.5 5,803.0 7,802.1 9,244.1 10,393.0 11,470.6 12,702.2

NA 17% 22% 21% 20% 18% 17%

0.6x 1.4x 1.8x 2.2x 2.4x 2.7x 3.0x

Financials in USDLand Buyout Model


Tangerine Hotels- Land Buyout

Source & Use of Funds ($ million)

Sources of Funds

Amount % of Total


Debt 11.3 50%

Equity 11.3 50%

22.6 100%

Use of Funds

Amount % of Total

Hotel 21.8 96.3%



Other 0.0 0.0%

22.6 100.0%


Tangerine Hotels

P&L Statement ($ million)



RevPAR

Room Revenue

% of Total Revenue

F&B Revenue

% of Total Revenue

Total Revenue

Growth

EBITDA

% margin

Net income

% margin


80 80 80 80 80 80 80

63.8% 63.8% 68.8% 68.8% 68.8% 68.8% 68.8%

161.1 193.3 212.7 233.9 245.6 257.9 270.8

102.7 123.3 146.2 160.8 168.9 177.3 186.2

2.2 3.6 4.2 4.7 4.9 5.1 5.4

68.7% 71.3% 71.5% 72.5% 73.0% 73.5% 74.0%

0.8 1.1 1.3 1.4 1.4 1.4 1.5

23.7% 21.9% 22.0% 21.3% 21.0% 20.6% 20.2%

3.2 5.0 5.9 6.4 6.7 7.0 7.3

56.7% 18.2% 8.4% 4.3% 4.3% 4.3%

1.8 2.9 3.4 3.7 3.9 4.1 4.2

55.1% 57.3% 57.8% 58.1% 58.0% 58.0% 57.9%

(0.2) 0.6 1.0 1.3 1.5 1.7 1.8

-6.5% 11.7% 17.0% 20.0% 21.8% 23.8% 24.3%


Tangerine Hotels

Debt Payment Ability($ million)

Debt

Interest expense

Debt / EBITDA

EBITDA/ Interest


11.3 10.9 10.5 10.1 9.6 9.2 8.8

1.4 1.3 1.3 1.2 1.2 1.1 1.1

6.4x 3.8x 3.1x 2.7x 2.5x 2.3x 2.1x

1.3x 2.2x 2.7x 3.1x 3.3x 3.6x 3.7x


Tangerine Hotels

Exit Return with Enterprise Value @3.5x of revenue ($ million)

Plus Cash



Less Senior Debt

Plus: License

Net Equity Value

Hotel IRR

Payback multiple



11.2 17.6 20.8 22.5 23.5 24.5 25.6

0.2 0.9 2.0 3.4 5.1 6.9 9.0

1.0 1.1 1.4 1.5 1.5 1.3 1.2

0.0 0.0 0.0 0.0 0.0 0.0 0.0

11.3 10.9 10.5 10.1 9.6 9.2 8.8

1.1 1.1 1.1 1.1 1.1 1.1 1.1

0.0 0.0 0.0 0.0 0.0 0.0 0.0

2.2 9.8 14.7 18.5 21.6 24.6 28.1

NA 30% 36% 34% 30% 27% 25%

0.4x 1.7x 2.5x 3.2x 3.7x 4.2x 4.8x

Total IRR

Payback multiple

-11% 27% 30% 29% 27% 26% 25%

0.9x 1.6x 2.2x 2.7x 3.3x 4.0x 4.8x

Financials in USDLand Lease Model


Tangerine Hotels- Land Lease

Source & Use of Funds ($ million)

Sources of Funds

Amount % of Total


Debt 8.67 50%

Equity 8.67 50%

17.3 100%

Use of Funds

Amount % of Total

Hotel 16.2 93.6%



Other 0.0 0.0%

17.3 100.0%


Tangerine Hotels

P&L Statement ($ million)



RevPAR

Room Revenue

% of Total Revenue

F&B Revenue

% of Total Revenue

Total Revenue

Growth

EBITDA

% margin

Net income

% margin


80 80 80 80 80 80 80

63.8% 63.8% 68.8% 68.8% 68.8% 68.8% 68.8%

161.1 193.3 212.7 233.9 245.6 257.9 270.8

102.7 123.3 146.2 160.8 168.9 177.3 186.2

2.2 3.6 4.2 4.7 4.9 5.1 5.4

68.7% 71.3% 71.5% 72.5% 73.0% 73.5% 74.0%

0.8 1.1 1.3 1.4 1.4 1.4 1.5

23.7% 21.9% 22.0% 21.3% 21.0% 20.6% 20.2%

3.2 5.0 5.9 6.4 6.7 7.0 7.3

56.7% 18.2% 8.4% 4.3% 4.3% 4.3%

0.9 1.9 2.5 2.7 2.8 2.9 3.0

27.4% 38.8% 41.3% 42.1% 41.9% 41.8% 41.6%

(0.7) 0.1 0.5 0.8 0.9 1.0 1.1

-22.3% 2.6% 9.1% 11.8% 13.2% 14.7% 15.1%


Tangerine Hotels

Debt Payment Ability($ million)

Debt

Interest expense

Debt / EBITDA

EBITDA/ Interest


8.7 8.3 8.0 7.7 7.4 7.1 6.7

1.0 1.0 1.0 0.9 0.9 0.9 0.9

9.9x 4.3x 3.3x 2.8x 2.6x 2.4x 2.2x

0.8x 1.9x 2.5x 2.9x 3.1x 3.4x 3.4x


Tangerine Hotels

Exit Return with Enterprise Value @3.5x of revenue ($ million)

Plus Cash



Less Senior Debt

Plus: License

Net Equity Value

Hotel IRR

Payback multiple


NA 17% 22% 21% 20% 18% 17%

0.6x 1.4x 1.8x 2.2x 2.4x 2.7x 3.0x


11.2 17.6 20.8 22.5 23.5 24.5 25.6

0.1 0.4 1.1 2.1 3.3 4.6 6.2

0.9 1.0 1.2 1.4 1.4 1.2 1.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0

8.7 8.3 8.0 7.7 7.4 7.1 6.7

1.1 1.1 1.1 1.1 1.1 1.1 1.1

1.1 1.1 1.1 1.1 1.1 1.1 1.1

5.7 12.9 17.3 20.5 23.1 25.5 28.2

Exit Strategy


Tangerine Hotels

Exit Strategy for Angel Investor

Share buyback by the Team after 4-7 years

PE funding to initiate the growth of chain of hotels

Sell Out to Strategic Buyer

Confidential Information

Thank You

94

Ashwin D’Cunha

Email: [email protected]

Mobile: + 91 9619279635

Bharat Vasandani

Email: [email protected]

Mobile: +91 9820789895

mailto:[email protected]

mailto:[email protected]

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