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| City Express |
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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 | 26214 |
| Company name | Hoteles City Express, S.A.P.I. de C.V. |
| Country | Mexico |
| Sector | Accommodation & Tourism Services |
| Environmental category | B |
| Department | Global Manufacturing & Services |
| Status | Pending Disbursement |
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| Date SPI disclosed | April 1, 2009 |
| Projected board date | May 4, 2009 |
| Previous Events | Signed: June 9, 2009
Approved: May 14, 2009 |
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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 |
Hoteles City Express ("the Company") is a hotel development and management company which has successfully engaged in the development and operation of 39 business hotels for the middle and middle low income markets in 24 of the 31 states of Mexico.
The proposed Project will consist of:
- the financing of 5 new hotels, which will be 100% owned by the company; and
- the refinancing of one existing hotel, located in Mexico City. |
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| Project sponsor and major shareholders of project company |
| The company was founded in 2003 by a management team with over 45 years of combined experience in the hospitality industry. Previous to their involvement in City express, Company management had developed and operated over 12,000 rooms in Mexico, the United States and several other countries in Latin America. The Company has developed and currently operates over 4,041 rooms in Mexico under three different brands: City express, City Suites and City junior. The Company's shareholders include Morgan Stanley Real Estate and a select group of prominent Mexican investors. |
| Total project cost and amount and nature of IFC's investment |
Total project cost is estimated at $39.5 million.
The proposed IFC investment will consist of a loan of up to $17.5 million including an A and C loan, both on IFC's own account. |
| Location of project and description of site |
The five new hotels, consisting of one City junior and four City express, are planned to be located in five separate underserved second tier cities in Mexico, aiming to serve a vast segment of domestic business travelers. In case of any change of location, the new location is to be discussed and approved by IFC so as to ensure compliance with all relevant IFC guidelines.
The five cities are: Ciudad Juárez (Chihuahua); Minatitlán (Veracruz); Los Cabos (Baja California); Obregon (Sonora); and Mérida (Yucatán). |
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| Anticipated development impact of the project |
The project will contribute to filling the large gap between supply and demand for quality budget hotels aimed at serving the growing middle and middle low income markets.
The project will also generate both downstream and upstream local supply linkages for local vendors serving the needs of both the hotel and its guests, and will significantly contribute to the lodging infrastructure and development of the local economy.
In addition, the project will create new permanent employment, both directly in the hotels and indirectly along the supply chain. Temporary employment will also be provided to local labor during the construction phase. |
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| IFC's expected development contribution |
IFC will play an important role in the project in terms of:
- providing long-term financing needed for this type of project which is not readily available in Mexico due to the current crisis
- offering of global hotel industry expertise
- compliance with World Bank environmental, fire and life safety and social standards |
| Environmental and social issues - Category B |
| The proposed Project is a category B project according to IFC's environmental and social review procedure. A summary of IFC's environmental and social review findings for the project, including the rationale for the B categorization, is available in the Environmental and Social Review Summary (ESRS). |
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| For inquiries about the project, contact: |
Roberto Palacios, Chief Financial Officer or
Santiago Parra, Corporate Finance Manager
Hoteles City Express
Montes Urales 715-2o piso
Col. Lomas de Chapultepec
Mexico DF 11000
Telephone: +52 55 5249 8050
Fax Number +52 55 5249 8098
Website: www.cityexpress.com.mx |
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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 |
Information is available in the company’s website: www.cityexpress.com, Selected City Express hotels across México and in the main offices of the company:
Robertos Palacios, Chief Financial Officer
Hoteles City Express
Montes Urales 715-2o piso
Col. Lomas de Chapultepec
Mexico DF 11000
Telephone: +52 55 5249 8050
Fax Number +52 55 5249 8098
Website: www.cityexpress.com.mx
City express will make adequate public disclosure of this transaction in the Mexican business and trade press. |
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