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| Heliopark Hotels |
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| Summary of Proposed Investment |
| This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors’ consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC’s activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. |
| Project number | 26722 |
| Company name | ZAO Heliopark Group |
| Country | Russian Federation |
| Sector | Accommodation & Tourism Services |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Pending Approval |
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| Date SPI disclosed | April 18, 2008 |
| Projected board date | May 20, 2008 |
| Date revised SPI disclosed | April 18, 2008 |
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| View Environmental & Social Review Summary (ESRS), click here |
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| Overview |
Sponsor/Cost/Location |
Development Impact |
Contacts |
Attachments |
| Project description |
Heliopark (Heliopark, or the company, or the Group) was established in 2000 and currently owns and/or operates ten hotels.
The Group consists of three main businesses:
- Heliopark Hotel Management, which operates all Heliopark hotels,
- Heliopark Development, a company responsible for renovation, building, design and sale of real-estate properties, as well as ownership of some of the properties; and
- Heliopark Travel Agency, which promotes and sells Heliopark’s packages and rooms.
Heliopark operates three hotel categories:
- family resorts;
- Country Club resorts; and
- business hotels.
The project comprises an expansion plan, which will be implemented in 2008-10 and involves the acquisition, renovation or construction of up to 18 hotels and the increase the number the hotels the company manages. |
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| Project sponsor and major shareholders of project company |
| Heliopark was founded in 2000 in Russia when Mr. Alexander Gusakov, the sole owner and President of the company, invested his earnings from retail business and purchased an abandoned Soviet-style health center 80 kilometers from Moscow, turning it into a profitable Heliopark “Country Club” style resort. Since then, Mr. Gusakov developed critical knowledge in middle market hotel operation and development in Russia. |
| Total project cost and amount and nature of IFC's investment |
| The total project cost is estimated to be $200 million. IFC is contemplating an equity investment of $25 – $27 million, and subsequent A Loan financing of up to $50 million. In addition, it is anticipated that $63 million in syndicated or co-lender financing will be attracted as part of the financing. |
| Location of project and description of site |
Heliopark owns and/or operates ten hotels with a total room stock of 966 in Moscow, Chelyabinsk (Urals region), Yalta (Crimea, Ukraine), Anapa (Krasnodar Region), Tver Region, Pskov (North-West of Russia), Sochi (Russian Black Sea Coast), Baden-Baden (Germany).
The expansion plan involves the creation of 1889 additional rooms in different projects in Moscow region, Tula region, Nizhny Novgorod region, Kalliningrad and Penza, among others. |
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| Anticipated development impact of the project |
- Benefits to Consumers:
Consumers will have improved access to family hotels and resorts in the proximity of large Russian cities, with a wide range of quality products and services at affordable prices.
- Enhanced Local Supply Chain:
The project will generate both downstream and upstream (local supply and travel agencies) linkages, contributing to the development of small and medium enterprise in the country.
- Employment Generation:
The project will create new employment, both directly and indirectly. It will provide additional direct employment with a multiplier effect along the supply chain.
- Upgrade of business practice:
IFC’s global expertise in hotels, social and environmental standards will add substantial value to the company. |
| IFC's expected development contribution |
| IFC will be playing a significant role in enhancing the long term capital base of the company. IFC’s investment should provide a demonstration effect for the hospitality industry and encourage further investments in the mid-market hotel and hospitality segment in Russia. Furthermore, IFC can bring global expertise in the sector and help to mobilize additional funds from external investors and lenders. |
| Environmental and social issues - Category B |
| Key environmental and social issues associated with this project are the client’s environmental and social assessment processes, including ongoing management of environmental and social issues, particularly related to labor and working conditions and life and fire safety. These issues can be readily mitigated. This is, therefore, an environment Category B project. |
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| For inquiries about the project, contact: |
Alexander Pankov, Vice-President, Investments,
Heliopark Group
4, Zemlyanoy Val
Moscow, Russia 103064
Telephone: +7-495-775-2466 |
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| For inquiries and comments about IFC, contact: |
General IFC Inquiries
IFC Corporate Relations
2121 Pennsylvania Avenue, NW
Washington DC 20433
Telephone: 202-473-3800
Fax: 202-974-4384
E Mail: Webmaster |
| Local access of project documentation |
The project documentation can be found in Russian on Heliopark’s website: www.heliopark.ru |
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