Barbados’s oldest hotel hopes to go public before year-end
BRIDGETOWN, Barbados, Thursday December 6, 2012 - Opened in 1887, the Crane Beach Hotel has passed to successive owners through the years but now Canadian business man Paul Doyle, who acquired the hotel in 1988, wants to widen its ownership with an initial public offering (IPO) before the end of this year.
According to a press release by Caribbean Information and Credit Rating Services Limited (CariCRIS), the company, which is owned by Millennium Investments Limited, plans to be incorporated as a limited liability company by the end of 2012 and list on the Trinidad and Tobago and Barbados Stock Exchanges.
CariCRIS stated that the IPO for the will The Crane Resorts Limited be issued for up to US $20 million ordinary shares and US $40 million in preference shares - 8 million shares priced at US $5 each.
The Caribbean’s only credit ratings agency stated that it had assigned initial ratings of CariA- (Foreign Currency Rating) and CariA (Local Currency Rating) on its regional rating scale, and bbAA- on the Barbados national scale for the issue of the US $40 million preference shares. These ratings indicate that CariCRIS judges the level of creditworthiness of this obligation, adjudged in relation to other obligations in the Caribbean to be good.
CariCRIS offered the opinion that this planned equity injection would further bolster the company’s net worth position and provide greater flexibility for it to take on additional debt if required. Additionally, it noted that management plans to increase existing room stock, grow through acquisitions and commence a resort development.
MIL’s primary activity is the development and operation of The Crane Residential Resorts (The Crane), a 252-room, high-end shared ownership interests resort located on the south east coast of Barbados. The ratings are supported by The Crane’s strong brand equity as evidenced by its receipt of the AAA3 Four Diamond Award in 2008 and recognition of the Zen Restaurant as number one in Barbados for two consecutive years (2009 and 2010) by Zagat.
CariCRIS said its ratings are also supported by The Crane’s well-qualified, highly experienced senior management team with some members having international industry-relevant exposure. Further supporting the ratings are strong operating efficiencies arising from a vertically integrated, low-cost business model, together with its comfortable financial performance characterized by good profitability and low gearing. The company has generated profits over the last fourteen years.
However, the ratings agency did note that the ratings were constrained by a declining tourism sector and highly competitive timeshare sub-industry. Further constraining the ratings was the fact that some policies and procedures are still in its nascent stages. The ratings are also constrained by a succession plan that is currently in its initial phase. Click here to receive free news bulletins via email from Caribbean360. (View sample)