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| Zara II |
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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 | 26113 |
| Company name | Zara Investment Holding Company Limited |
| Country | Jordan |
| Sector | Accommodation & Tourism Services |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Active |
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| Date SPI disclosed | June 20, 2007 |
| Projected board date | July 23, 2007 |
| Previous Events | Invested: June 19, 2008
Signed: February 28, 2008
Approved: February 28, 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 |
Zara Investment (Holding) Company (Zara or the company) is hotel holding company in Jordan and an IFC client since 1996. The project involves funding Zara’s current expansion program and assisting in improving its balance sheet that has been affected by the instability in the region. Specifically, IFC’s corporate loan will be:
- for partial financing of the Zara’s hotel at Tala Bay -- a four-star 450 room hotel in Tala Bay Resort on the Red Sea near Aqaba, along with other potential expansions in Jordan; and
- for re-profiling some of the company’s existing debt. |
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| Project sponsor and major shareholders of project company |
| The project sponsors are the Masri Group and the Talhouni Group, who founded and developed Zara into a market leader in Jordan. The sponsors are the largest shareholders with a combined stake of 38%. Zara is listed on Amman Stock Exchange and the remaining shares are held by various institutions and the public. IFC’s shareholding is 1.34%. |
| Total project cost and amount and nature of IFC's investment |
| The total project cost is estimated at $84 million. The proposed IFC investment is a $40 million A loan for IFC’s own account. |
| Location of project and description of site |
| Zara’s six operating hotels are located in Amman, on the Dead Sea, in Petra and in Aqaba. The hotel under construction is in Tala Bay, near Aqaba. |
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| Anticipated development impact of the project |
| The project will improve and facilitate diversification of tourism benefits throughout the country helping the tourism industry coming out of a difficult period. The project will result in job creation, foreign currency revenues and in further growth in the tourism industry and other related sectors. In addition, the project will support implementation of government’s National Tourism Strategy. |
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| IFC's expected development contribution |
| IFC will support an existing client in its recovery from the effects of volatility in the tourism industry affected by the regional and global events, in expansion in new destinations, and in consolidation of its leadership role in tourism in Jordan. Specifically, IFC’s investment will provide much needed long-term funds not otherwise available that would support Zara’s long-term development plans and help smoothen the ups and downs in Zara’s operational cashflows – an outcome of volatility of Jordan’s hotel industry. The IFC financing will also assist in re-profiling Zara’s balance sheet that has been affected by the instability in the region. Finally, IFC’s involvement will strengthen compliance with environmental and social guidelines. |
| Environmental and social issues - Category B |
| Key environmental and social issues at all properties are environmental and social management structures, labor and working conditions, emissions to air and water, use of energy and water, life and fire safety, and possible public health impacts arising from swimming pools, and hotel food and water. Potential impacts of the Petra properties upon the Bedul Bedouin and upon cultural heritage are considered, while possible impacts on biodiversity are considered in the case of the Tala Bay Hotel and the Dead Sea property. The process of land acquisition for the Tala Bay project was also considered. |
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| For inquiries about the project, contact: |
Ms. Lina Annab, General Manager
Zara Investment (Holding) Co Ltd
P.O.Box 5315, Amman 11183, Jordan
Telephone: +962-6-4646781
Fax: +962-6-4646782
Website: www.zaraholding.com |
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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 |
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