Nairobi, June 21, 2006 — The International
Finance Corporation, the private sector arm of the World Bank Group, today
signed an agreement to provide $7.3 million to support Panari Centre Limited
or “Panari”, a leading hotel and shopping centre in Nairobi, Kenya.
IFC’s investment will support Panari’s sponsors in their first investment
in the hospitality sector by refinancing some of its existing loans with
financing in a currency and with tenors that better match Panari’s income
currency and the long-term nature of its business. Panari will use
IFC’s long-term loans to finance its permanent working capital needs and
upgrade its facilities according to IFC’s environmental guidelines. IFC’s
investment will help bring corporate governance improvements to Panari,
thus helping the sponsors to expand within the country.
Dimitris Tsitsiragos, Director of IFC’s Global Manufacturing and Services
Department, commented, “New hotels take time to establish themselves and
thus are outperformed by more established hotels for several months. In
Panari’s case, this timeframe was short, as the hotel has achieved promising
operational and financial results since it began operations in July 2005.”
Panari is the first new hotel built in Nairobi within the last ten years.
It is the only one that provides retail and entertainment options for its
customers, and is supporting the development of the city, an increasingly
important regional hub for business, conference and travel tourists. The
shopping centre contributes to the rapidly expanding local retail sector
by providing modern facilities and entertainment options, including the
only ice-skating rink in East Africa.
Bhagwanji Ratna, Chairman of Panari, commented, “IFC is supporting the
long-term viability of Panari by providing long-term US Dollar financing
not available in the country, and expertise to enhance Panari’s shopping
mall operations, corporate governance practices, and HIV/AIDS prevention
Richard Ranken, Director of IFC’s Sub-Saharan Africa Department, added,
“This transaction fits well with IFC’s strategy in Kenya to provide long-term
financing to companies in crucial sectors such as tourism and retail. In
addition, supporting local sponsors is a priority for IFC.”
Panari is owned by Arjan and Samji Naran Hirani, and by Bhagwanji and Pushpaben
Ratna. Along with the Panari Centre Limited, they own Panari Enterprises
Limited, a small real estate developer in Nairobi.
The International Finance Corporation is the private sector arm of the
World Bank Group and is headquartered in Washington, D.C. IFC coordinates
its activities with the other institutions of the World Bank Group but
is legally and financially independent. Its 178 member countries
provide its share capital and collectively determine its policies.
The mission of IFC (www.ifc.org)
is to promote sustainable private sector investment in developing and transition
countries, helping to reduce poverty and improve people’s lives. IFC finances
private sector investments in the developing world, mobilizes capital in
the international financial markets, helps clients improve social and environmental
sustainability, and provides technical assistance and advice to governments
and businesses. From its founding in 1956 through FY05, IFC has committed
more than $49 billion of its own funds and arranged $24 billion in syndications
for 3,319 companies in 140 developing countries.