Kathmandu. MUSTANG: Mustang Mountain Home Limited is going to launch the initial public offering (IPO) of the first company of Yeti Holdings.
The company, which operates luxury resort, Sintamani Mustang brand hotel in Mustang, a mountainous district of Gandaki State, plans to raise Rs 370 million in paid-up capital from the public through the IPO.
Yeti Airlines Limited, the main promoter of Yeti Holdings, has announced to issue the IPO, but the work for the issue has not progressed.
According to rating agency Care Ratings Nepal, Mustang Mountain Home Limited has a bank loan of Rs 121 million. NIBL Equity Partners has invested Rs 200 million in share capital.
The company’s interest-bearing ratio is much lower than expected. This has put pressure on the company to increase the business to bear the debt liability.
In the event of repaying the bank’s loan installment, the ability to meet the income earned from daily transactions will be worth considering. The proposed primary issue is expected to strengthen the company’s financial position. From a debt burden perspective, the company’s ability to repay its debt by improving profits with the size of the transaction will be considerable.
Company risks and challenges:
Mustang is a remote mountainous district. Nepal’s mountainous region, which is at high risk of climate change, can face a crisis at any time due to weather disturbances and disasters. Which can block roads or disrupt air services during the main tourist season. This risks limiting tourist arrivals. Moreover, since the tourism sector is directly related to the overall economic situation of the country, nepal’s economic development will also have an impact.
Strengths:
According to credit rating agency Care Ratings Nepal, mustang Mountain Home Limited’s promoter group has experienced investors in the tourism sector for more than 25 years. It is an undertaking of Yeti Holdings. The group is chaired by Lhakpa Sonam Sherpa.
The company has signed an agreement with HMD Asia to operate the hotel under the Sinta Money brand. Sinta Money is a collection of luxurious boutique hotels designed by artist Bill Bensley.
Sinta Money has partnered with Hidden Dorways, a company known for promoting high-quality tourism in the US and Canada, to promote the trade of Mustang.
Mustang Mountain Home Limited was established as a private limited company in 2014 and was converted into a public limited company in 2013. The company has built a luxury hotel with 29 suite rooms on an area of 35,103 square meters in Marfa, Mustang. This hotel is located at a distance of 24 kilometers from Muktinath Temple.
Hotel business:
The hotel is in the current fiscal year 2081. It earned Rs 77 million in the first half of 1982. Last fiscal year 2080. Its total income was Rs 76 million in 1981. The first year of operation 2079. In 1980, its income was rs 18 million.
According to Care Ratings Nepal, the construction cost of the hotel was Rs 1.16 billion.
issuer rating:
Care Ratings Nepal has given ‘CARE NP B+ Issuer Rating’ (CARE-NP B+). Such a rating indicates that there is a high risk involved in meeting financial obligations in a predetermined time.
