We have had a very difficult time to invest in Nepal - Mike Bolsover
The Tiger Palace Resort in Nepal has been a popular brand in hospitality sector in Nepal. Silver Heritage Group launched their first 5-star integrated resort – Tiger Palace Resort in Bhairahawa, Nepal in March 2018.Located in Bhairahawa, in southern Nepal’s subtropical Terai region, Tiger Palace Resort is just 8 km north of the India-Nepal border. Easily accessible to Indian travellers, it is a short 2 hour 45 minutes drive from the Gorakhpur Airport (Uttar Pradesh, India) making it a perfect destination for those seeking a break from the usual, the regular, the boring.
The investment of Silver Heritage Group went out of the blue, revenues have not been able to reach the levels everyone expected, bank debt have caused a black eye and improper construction on land that belonged to a local temple was seen as a major faux pas. As Silver Heritage began to consider an expansion of the project, it also began to to remove the thorn, with several companies indicating a desire to purchase the property. The idea is tempting and Silver Heritage has previously received bids of up to $33 million, but a new offer is now on the table.
A new suitor, identified as Indra Bahadur Thapa, wants Tiger Palace. He also wants Silver Heritage’s gaming operations at the Millionaire’s Club and Casino located in Kathmandu. While the other offers would have given as much as $33 million for Tiger Palace, Thapa is willing to spend $33.9 million for all of Tiger Palace’s operations in Nepal.
We talked about the on-going status of Tiger Palace Resort to the group CEO of Silver Heritage Group, Mike Bolsover.
Managing Director and CEO
1. We’ve heard some individual is buying a tiger palace resort, is it is hoax?
Mike : The board has received a bid and has granted the potential buyer a period of exclusivity to conduct due diligence. The period of dd begins after receiving a deposit of US $3m from the buyer. That is all at this stage.
2. If it is true, how big is the deal?
Mike: The proposal is for enterprise value of US $34m, with US $20m payable in cash.
3. How credible is the new investor? Will they afford to make the deal?
Mike: So far credible.
4. If the news is true, what dragged you to make this swift decision?
Mike: Not a swift decision. Board has assessed options and this is one of them. Any deal will need full definitive detailed documentation and will require shareholder and bondholder and board approval.
5. The investor told that Silver Heritage Group asked him for an offshore settlement of the deal in Singapore or Hong Kong, is it true?
Mike: Not true. Company is registered in Australia.
6. There are also some legal issues going on with regards to the land, will this affect the change in ownerships?
Mike : No material issue. Regarding the legal case we have reported this to Australia Securities Commission too and
7. What is the exact position, is Silver Heritage Group near to bankruptcy without further investment?
Mike: We are having a good series of monthly results and all trending positively.
8. So far, I know, government of Nepal had welcome you with a red carpet, why are you selling your property, is it because of lucrative deal or losses?
Mike: We have had a very difficult time to invest in Nepal and I am working with the government to promote FDI but there are several key issues which remain as yet unsolved for foreign direct investment. There must be significant reform to be able to attract more FDI.
9. What challenges did you pursue to run business in Nepal?
Mike: There are numerous and significant challenges I would like to discuss next time.
10. Govt. Has just declared visit Nepal 2020, will these campaigns boost the business of hotel and resorts?
Mike: They are trying hard but it is pivotal that Gautam Buddha International Airport opens in 2019 otherwise there will be significant embarrassment - currently there is no confidence in the government of Nepal and its ability to complete in a timely fashion key infra projects.