Renaissance Village Duqm (‘RSVD’) has successfully concluded the debt and equity raising for its first phase of expansion of RO 31.7 million. The construction of the first phase of expansion has been completed out of funding from equity, shareholder’s bridge funding and internal surplus; and the capacity has increased by 5K+ beds taking the total capacity of RSVD to 23K+ beds.
Shareholders of RSVD have funded 40% of the expansion. In addition to the major shareholder Renaissance Services SAOG, other shareholders of RSVD include Royal Court Affairs, Ministry of Defence Pension Fund, Bank Muscat and Al Khonji Holding Group.
The debt financing for the expansion has been secured from six leading Omani financial institutions, Bank Muscat, National Bank of Oman, Bank Dhofar, Ahli Bank, Oman Arab Bank and Al Omaniya Financial Services. The key highlights of the debt financing include long-term tenure, supportive step-up repayment schedule akin to a bond structure and competitive terms mutually beneficial to the company and financiers.
RSVD has also secured the debt portion of the total financing of RO 11 million for the second phase of expansion. The company will proceed with the debt drawdown and equity injection for the second phase only when the company starts construction after restrictions related to the pandemic are eased.
The successful conclusion of the debt which was 2.5x oversubscribed, is a testament to the trust and confidence of the financial institutions in the strong fundamentals and long-term business model of the company, underpinned by the company’s track record of performance, strong corporate governance, prospects for future growth and clear visibility of cashflows.
The expansion will further cement RSVD’s strong position as the dominant player in accommodation solutions, providing high-quality, ILO standard world-class accommodation at highly competitive costs. It highlights the company’s commitment to delivering on the OPAZ and SEZAD strategy for Duqm, and for the Government of Oman to realise its future vision for Duqm.
RSVD is proving to be the accommodation solution of choice for its clients especially during the current challenges, in particular with Covid-19. RSVD timely and adept responses to Covid-19 and cyclones like Hikka, ensure the facility is recognised as a safe haven for workforces. The measures taken have enabled clients to continue their work and projects without interruption. Authorities and clients have expressed appreciation of the role of RSVD in suppressing the virus, keeping people safe and operations functioning.
With Duqm at the heart of the national imperative to diversify economy whilst ensuring social development, RSVD is well aligned with Oman’s Vision 2040.
Vishal Goenka, Group CFO & Deputy CEO of Renaissance, said, “We are delighted with the support our banking and equity partners have extended to us in these unprecedented times. Despite the current tough market for financing, we have been able to successfully conclude the debt and equity raising for the expansion of RSVD because of our lenders’ and shareholders’ belief in the company’s fundamentals and business model. We thank our shareholders, and our lenders of existing and new financing for their unwavering confidence in us and their commitment to the company.
We also thank our Financial Advisor to the debt financing project - Bank Muscat Investment Banking Team for their contribution in achieving an exceptional outcome in an accelerated timeframe in difficult market conditions. Our thanks also to our legal advisors Al Busaidy Mansoor Jamal and Addleshaw Goddard for their assistance in the successful completion of the debt raising transaction.
With the conclusion of the financing, RSVD is well placed for growth and will continue to deliver improvements in, standards, safety and service offerings in Duqm. For us, RSVD is not just another business, it is a small contribution to Nation-building.”