RAK Hospitality Holding LLC raised 880 million dirhams ($240 million) from a loan to fund expansion and repay debt.
The government-run owner of hotel assets in the United Arab Emirates got the eight-year loan from Dubai-based Mashreqbank PSC and Jordan’s Arab Bank Plc, it said in a statement on Sunday. The amortizing facility was raised for its RAK National Hotels unit and will be used to part fund the the purchase of two hotels, refurbish two existing properties and to pay down existing debt.
“We are continuously rethinking the competitive landscape,” Yannis Anagnostakis, RAK Hospitality’s chief executive officer,m told a news conference in Ras Al Khaimah on Sunday. “There is no doubt that there is a shift in travel flow and more and more tourists are now choosing Ras Al Khaimah.”
The emirate’s revenue from tourism exceeded 1 billion dirhams last year, Anagnostakis said. The holding company was set up last year by the government of Ras Al Khaimah, one of the seven sheikhdoms that make up the U.A.E.
RAK Hospitality will buy the Rixos Bab Al Bahr and the Banyan Tree Al Wadi, and will also use the money to refurbish the Hilton Ras Al Khaimah and the Hilton Resort and Spa.
The holding company will explore various options over the next three years to raise more funds including the setting up of real estate investment trusts, joint ventures and a possible initial public offering, Anagnostakis told Bloomberg News.