Announcement of IFC and International Group Commercial Banks Help Finance Sri Lanka Hotel on October 21, 1981

IFC Press Release o. 82/7 Wednesday, October 21, 1981 IFC and International Croup of Commercial Banks Help Finance Sri Lanka Hotel Sri Lankan and foreign investors and the International Finance Corpor- ation (TFC) are joining to finance Taj Lanka Hotels Limited, a new company that will build a tnO-room, first-class hotel in Colombo. Principal sponsor of the $35.5 million project is The Indian Hotels Company Limited which owns and operates 11 hotels in India, including the Taj Mahal Hotel in Bombay, and has other operations abroad. IFC, which assists the private sector of developing countries, is pro- viding $17.5 million in loans with S11.1 million being taken up by a group of financial institutions: Amsterdam-Rotterdam Bank N.Y., Singapore Branch: Morgan Guaranty Pacific Limited, Singapore: State Bank of India, Nassau Branch: and The Hongkong and Shanghai Banking Corporation. ITC is also making a 51.P million subordinated convertible loan for the project and Wardley International Bank Limited, Nassau, is lending S4 million. Equity financing is being provided by Indian Hotels, 54.5 million: private investors in Oman associated with Indian Hotels, 53 million: IFC, 9700,000: and a public share offering in Sri Lanka, to be underwritten by the Government of Sri Lanka, SL, million. The Taj Colombo Hotel will be located in Colombo within a short distance of the business district. It will consist of three adjoining buildings with pro- vision for expansion at a later date. The hotel will include restaurants, coffee shop, and a banquet/conference hall. Indian Hotels will be responsible for project implementation and manage- ment of the hotel. Lyon and Associates, Inc., of the United States is architect for the project. The project is expected to contribute substantially to the Sri Lankan economy. The Taj Colombo Hotel will facilitate additional tourist and business - 2 - travel to the country which has been hampered by a shortfall in first-class accomodations. Tt will generate estimated net foreign exchange earnin.ps of $9 million annually, employ about 1,000 persons directly, and create, indirectly, some 400 additional jobs. The project is in line with the Government's efforts to encouram, tourism and diversify its sources of foreign exchange earnings. [Any inquiries strictly relating to TFC's participation in this project should be directed to the IFC Information Office, 1PI1 H Street, N.W., Washington, P.C. 20433, Telephone (202) 676-0394.1