Care Ratings assigns satisfactory grade to long term bank facilities of Swornim Boutique Hotel Private Limited

CARE Ratings Nepal Limited (CRNL) has assigned rating of “CARE-NP BB” to the long term bank facilities worth NPR 725 Million of Swornim Boutique Hotel Private Limited (SBH).

The rating assigned to the bank facilities of SBH is constrained by project implementation risk as the project is in the preliminary stage of construction, expected losses and weak debt coverage indicators in the initial years of operation, competition from existing and new hotels in the same area and exposure to volatile interest rates.

The rating, however, derives strength from strong promoter group although limited experience in the hotel industry, association with reputed hotel brand, location advantage, government initiative and support for tourism and financial closure achieved for the project.

Ability of the company to successfully execute the project in time and satisfactory operations thereafter will be key rating sensitivities.

SBH was incorporated in August 24, 2012 for setting up a hotel. At present, the company is operating 20 rooms’ hotel nearby to the proposed project. The present hotel is proposed to be transferred to a new company. Now, the company is setting up a 3-Star premium hotel property at Tangal, Naxal Road, Kathmandu which will operate under the brand name of “Holiday Inn Express” within the InterContinental Hotels Group PLC.

SBH is promoted by Mr. Naresh Lal Shrestha along with four other individuals who are prominent business person of Nepal. The project comprises of 100 rooms spread over G+ 10 floors, restaurant & bar, conference/ event hall, health club on a total land of almost 11,679 sq. ft.

(Source: CARE Ratings Nepal)