Sun of Mauritius Plans to Begin Bond Program Within Three Weeksby
Company plans to issue 60% of multi-currency program in euros
Hotel group aims to reduce gearing ratio to 40% by 2019
Sun Ltd., the third-biggest hotel group by market value in Mauritius, plans to issue as much as 60 percent of its 3 billion-rupee bond program ($84.8 million) in euros.
The multi-currency program on the Stock Exchange of Mauritius will begin within three weeks and help the company reduce its 9.3 billion-rupee debt, Anderson said in an interview Wednesday at his office near the capital, Port Louis. The chain aims to cut its gearing ratio, the amount of borrowed funds to equity, to 40 percent by 2019, from 53 percent currently.
“We want to reduce the cost of our debt with this issue,” he said. “We should make savings of about 20 million rupees on existing debt.”
The company will set interest rates and the size of tranches after meeting potential investors, he said. “Within three weeks the bonds should be issued,” he said. “Our debt-refinancing strategy should put us be in a better position.”
The company posted a 567 million-rupee loss in the year through June after refurbishing two properties, Le Shangri-La Touessrok and Kanuhura in the Maldives. Sun achieved a 83 percent occupancy rate in the last financial year and a 93 percent rate in the second and third quarter, according to Anderson.
By the start of December, all five hotels managed by Sun will be operational, including the Kanuhura Maldives that’s closed for renovations. This should boost the company’s performance in 2017, he said.
“This year we were very limited because the tariffs were set a year-and-a-half ago,” he said of the financial period through June. “In December, these rates will expire. We’ve worked on a new pricing strategy, which is already bearing fruits. If you look at the early bookings, the average price obtained is twice what we had at the same time last year.”