Vantage Capital (www.VantageCapital.co.za), Africa’s largest mezzanine fund manager, today announced that it has provided $ 23 million in mezzanine debt financing to PickAlbatros Hotels. The proceeds will be used to finance working capital and renovations to several recently acquired hotels.
PickAlbatros is a leading hotel owner and operator in Egypt, with a portfolio of 15 operating hotels and nearly 10,000 rooms at the Red Sea resorts of Hurghada, Sharm El Sheikh, Sahl Hasheesh and Marsa Alam . It also operates two hotels in Morocco. The Red Sea has become an increasingly popular tourist destination, especially among Europeans looking for affordable beach vacations that offer year-round sun, warm water, and snorkeling and snorkeling. world class snorkel. In fact, more than half of all tourists arriving in Egypt head directly to the Red Sea, and the total number of tourist arrivals to the country has increased by more than 140% from 2016 to 2019. PickAlbatros played a role. important role in contributing to the growth of tourism in the country. region, thanks to its constantly expanding portfolio of high quality 4 and 5 star hotels that include beachfront access, extensive swimming pool networks and the region’s largest water parks. The hotel group recently acquired five more hotels and part of the funding from Vantage will be used for renovations as the hotels are set to be relaunched under the PickAlbatros brand.
Since the first PickAlbatros hotel opened in Hurghada in 1992, Mr. Kamel Abu Ali, owner and CEO of PickAlbatros, has relentlessly pursued his vision of building a high quality hotel portfolio across the Red Sea. Thanks to its significant efforts, resort towns such as Hurghada are now firmly on the map as a popular destination for European sun seekers. “We have always taken a long-term view of the growth potential of the Red Sea hotel market and have successfully implemented this growth strategy, constantly expanding our hotel portfolio over the past three decades”, he noted. âVantage shares our vision and has been willing to support our hotel group with funding that gives us the flexibility to invest in expansion and working capital as the business sees fit. They have also successfully delivered on their commitment to meeting very tight disbursement deadlines and in doing so have proven to be a highly professional company and a trusted partner. “
David Kornik, Partner at Vantage Capital, noted, âAlthough Covid-19 has created a significant disruption in the global hospitality industry over the past year, we recognize that the long-term growth potential of PickAlbatros hotels remains firmly intact. The resilient performance delivered by the hotel group in recent months, despite widespread travel restrictions in its main European market, underscores the attractiveness of its high-quality, value-for-money offering in a wide range of markets. As vaccines are widely distributed, we expect international beach tourism to pick up sharply and the Egyptian Red Sea is well positioned to be a disproportionate benefactor in the years to come.
The transaction represents the 31st investment in three generations of mezzanine funds, its portfolio now being spread over eleven African countries. Warren van der Merwe, Managing Partner at Vantage Capital, added, âThe transaction with PickAlbatros marks our inaugural investment in Egypt. With a population of over 100 million and a fast growing economy, it is a country with great potential and a valuable addition to our investment map. Tourism is a key sector of the economy and we are proud to support one of the main local players in the hospitality industry.
PickAlbatros represents Vantage’s third investment in the tourism sector after supporting the construction of new hotels in Uganda (141 beds) and Namibia (181 beds) by partnering with local hoteliers in these markets. The Vantage team believes in the long-term growth potential of tourism in Africa, which today represents only 5% of the global tourism market. According to the United Nations World Trade Organization, some 67 million tourists visited Africa in 2018, representing a 7% increase from the previous year and making Africa the second largest region in the world. fastest growing, after Asia-Pacific. Brookings Institution, a U.S. research group, predicts tourist arrivals to Africa will reach 134 million by 2030, with consumer spending on tourism, hospitality and recreation reaching $ 262 billion, an increase of $ 138 billion compared to 2015. This will have a significantly positive impact on the continent. , generating millions of jobs and billions of dollars in foreign exchange earnings.
Zilla Capital acted as financial advisor to PickAlbatros. Matouk Bassiouny & Hennawy (in Egypt) and Werksmans (in South Africa) acted as legal advisers.
Distributed by APO Group on behalf of Vantage Capital Group.
For more information contact:
David Kornik Partner [email protected]
Omar Gharbawi Senior Partner [email protected]
About Vantage Capital:
Vantage Capital is an Africa-focused fund manager with offices in Johannesburg and Cape Town. The company was founded in 2001 and has raised over $ 1.1 billion in funds. Since 2006, Vantage Capital’s Mezzanine division has made 31 investments in three funds in 11 African countries, making it the largest and most experienced independent mezzanine funder on the continent. In addition, Vantage Capital’s GreenX division has made 14 senior debt investments in South African solar and wind power projects through two funds.
Vantage Capital targets mezzanine debt opportunities of $ 10-40 million in 14 key African markets. Mezzanine debt is an intermediary form of risk capital, which sits between senior debt, the least risky part of the capital structure, and equity, the riskiest. It combines elements of debt and equity, thus providing companies with long-term financing on terms less dilutive to shareholders than equity.