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Ministry of Investment suggests allowing HOTAC to offer bonds - Daily News Egypt

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Ministry of Investment suggests allowing HOTAC to offer bonds

Government is working to repair public sector companies’ financial structures that suffer significant losses and weak production

Minister of Investment Ashraf Salman during his visit to a Holding Company for Tourism, Hotels, and Cinema (HOTAC) project (Photo courtesy of Ministry of Investment)
Minister of Investment Ashraf Salman during his visit to a Holding Company for Tourism, Hotels, and Cinema (HOTAC) project
(Photo courtesy of Ministry of Investment)

The Ministry of Investment is considering allowing the Holding Company for Tourism, Hotels, and Cinema (HOTAC) and its subsidiaries to offer fixed income bonds to lighten borrowing costs  according to Minister of Investment Ashraf Salman.

He also suggested exchanging financing periods with cash flow, in a move to improve the financial position of Egyptian companies and transform them into profitable ventures.

Salman said the “progression of business sector companies has generated an urgent need to strengthen these companies’ financial positions, repair them in structural and technical terms, and consider unconventional solutions to the sector’s challenges”.

Salman added that he would follow-up with developments step-by-step to improve the companies’ situations, especially in the tourism and hotel sector which provides many direct and indirect job opportunities.

“The Holding Company for Tourism, Hotels, and Cinema achieved good indicators in terms of improved profitability and the value of property rights and returns for current business activities,” Salman said during a Saturday press conference.

He added that the state is dedicated to strengthening companies’ competitiveness, continuing to achieve the economic and social objectives they have been charged with, inject new investments into the companies.

The conference followeda meeting Saturday evening between Salman, Mervat Hatabah, Acting Chairman of HOTAC, and a number of heads of HOTAC subsidiaries. The meeting was attended by leading ministry figures who work on issues pertaining to the public business sector and managing of state-owned assets.

“During the meeting we discussed developing plans put forward by each company and the mechanisms necessary to implement them” said a source from the Ministry of Investment who attended the meeting.

Salman pointed out that the companies enjoy an element of power, including a diversity of activities, the availability of assets, and an accumulation of experience. He added, however, that they must adopt policies and procedures that strive to achieve sustained development. This includes the use of modern technology and advanced management techniques, Salman said, indicating the importance of keeping up with global developments in these areas to ensure presence and competition.

Hatabah explained the need allow the private sector to participate in various projects in order to reap the benefits of private sector expertise and success.

“Total revenues for subsidiaries during the 2014/2015 fiscal year were estimated at approximately EGP 1.2bn compared to EGP 800m initially for FY 2013/2014,” said Hatabah.

She added that HOTAC is making great efforts to improve occupancy rates for subsidiary owned hotels. To achieve this goal, the company is working to diversify activities and improve returns on joint investments of HOTAC and its subsidiaries.

Salman visited Le Meridien in Dahab owned by the Egyptian General Company for Tourism and Hotels (EGOTH), as well as Dahab Resort owned by Misr Hotels Company. There he observed the progress made by both hotels, including on work conditions for employees, occupancy rates, and plans developed by both hotels to attract more guest in the coming months.

Hatabah explained that Dahab Resort recently obtained a certificate for quality from a global organisation specialising in global traveller recommendations. This certificate is granted to only a small number of hotels in the world, she added.

Salman also toured a plot of land owned by Al-Montazah for Tourism and Investment on an area of 6m square metres and heard development proposals for the plot of land.

He inspected another plot of land allocated to the company Emak Aqaba owned by the Ministry of Civil Aviation on an area of 158,000 square metres overlooking the Red Sea coast. There are plans to build a tourism resort on the plot.

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