As of September 7, 2023, prominent hotel groups in Mauritius are grappling with substantial debt.
LUX: Less Indebted, Aggressive Expansion
LUX, despite aggressive expansion in the late 2000s, has historically maintained lower debt levels compared to peers. They expanded room capacity from 752 in 2004 to 1,493 in 2009. Although the group accumulated debt during the financial crisis, recent cash inflows in 2022 and 2023 are expected to enable them to comfortably repay debts over the next four fiscal years.
SUN: Indebted Over Rs 8 Billion
SUN has faced challenges in servicing its interest due to low interest coverage. However, in 2023, improved interest coverage and debt ratios were achieved through strategic actions such as selling Kanuhura, investments from the Mauritius Investment Corporation (MIC), and increased profits. Despite positive cash flows, SUN may still need to refinance loans, presenting refinancing risk.
NMH: Burdened with Rs 23 Billion Debt
NMH incurred substantial debt (Rs 23 billion) during 2007-2011 for major projects like Royal Palm Marrakech, Beachcomber Trou-aux-Biches, and land acquisition at Les Salines. Rising interest rates could pose challenges in debt servicing and capital repayment. NMH must refinance annually, potentially facing difficulties if credit tightens.
Source: Defi Media
