Rating of Hotel Chitwan put on notice of withdrawal by CARE Ratings Nepal; Hotel not cooperating to provide information

CRNL has been seeking information from Hotel Chitwan Private Limited (HCPL) to monitor the rating(s) vide e-mail communications/letters dated January 05, 2020; January 16, 2020; January 20, 2020; January 29, 2020; January 31, 2020; February 05, 2020 and February 12, 2020 and numerous phone calls. However, despite our repeated requests, the company has not provided the requisite information for monitoring the ratings. In line with the extant Securities Board of Nepal (SEBON) guidelines, CRNL has reviewed the rating on the basis of the best available information which however, in CRNL’s opinion is not sufficient to arrive at a fair rating. If after the monitoring of the rating there is no cooperation from the Client, then thereafter, CRNL may withdraw the rating. The rating on Hotel Chitwan Private Limited bank facilities will now be denoted as CARE-NP BB+/CARE-NP A4+; ISSUER NOT COOPERATING* (Notice of Withdrawal). 

*At the time of last rating on February 13, 2019, the following were the rating strengths and weaknesses: 

Key Rating Weaknesses

• Execution risk and stabilisation risk associated with the project
• Exposure to volatile interest rates
• Risk of Renewal of leases in timely manner and single property risk
• Competition from the existing hotels and supermarkets in the vicinity

Key Rating Strengths

• Financially sound promoters and experienced management team in the hotel industry
• Reputed brand for the hotel
• Financial closure achieved for the project cost including cost overrun
• Location advantage
• Diversified Revenue Model
• Government initiative and support for tourism

About the Company

Hotel Chitwan Private Limited was incorporated in May 1980 and is presently setting up a multi brand shopping mall cum hotel property at Bharatpur, Chitwan by name of CG Landmark. HCPL is promoted by individuals and the company related to Chaudhary Group of companies of Nepal. The project is built on the total land of ~0.62 acres with built up area of ~1.8 lakhs sq. feet. The building will have 70 retail shops, multiplex, food court and also houses a hotel with 48 rooms, fine-dine restaurant, outdoor dining, banquet and conference hall with 300 pax capacity; roof-top swimming pool, gym and spa and parking facility. CG Landmark will be the first of its kind integrated mall outside Kathmandu in Nepal. HCPL is located at 1 km from Bharatpur Airport, ~150 kms from Kathmandu, ~118 kms from Sonauli border, UP, India and 133 kms from Raxaul border, Bihar, India.

Details of Bank Facilities 

*Issuer did not cooperate; Based on best available information

Source: https://careratingsnepal.com/

Read the full report here.