City Hotel’s long term and short term loans rated BB and A4 by CARE Ratings Nepal; Five-star hotel property located in Soalteemode, Kathmandu named “Hyatt Place”

CARE Ratings Nepal Limited (CRNL) has assigned rating of „CARE-NP BB‟ to the long term bank facilities and CARE-NP A4 to the short term bank facilities of City Hotel Limited (CHL). 

Key Rating Weaknesses

• Operational stabilization risk and long gestation period associated with hotel industry
• Time overrun of the hotel followed by project cost overrun
• Financial risk profile marked by loss and weak debt coverage indicators for the initial year of operations
• Exposure to volatile interest rates
• Susceptibility to cyclicality, intense competition and geographic concentration risk in the hospitality sector

Key Rating Strengths

• Experienced directors and resourceful promoters
• Association with reputed hotel brand likely to benefit the company in terms of marketing and hotel operations
• Strategic locational advantage of the hotel
• Low project implementation risk associated with the hotel project
• Financial closure achieved for the entire debt component
• Government initiative and support for tourism
• Increasing trend of tourists in Nepal

About the Company

City Hotel Limited, incorporated on December 05, 2007, is setting up a 5-star hotel property located in Soalteemode, Kathmandu which will operate under the brand name of Hyatt Place with a total of 153 room keys and belongs to the Golyan Group of companies. The company plans to start commercial operation of the hotel from July 2020 onwards. The company is being promoted by 7 shareholders who have infused total paid-up equity of Rs. 780 Mn as on July 16, 2019.  

Details of the Facilities rated

 Source: https://careratingsnepal.com/

Read the full report here.