Shangri-La, MCS resume hotel development
Shangri-La Asia and MCS Holding have resumed development of a property-cum-hotel project in Ulan Bator, Mongolia, involving a total investment of US$64 million.
Shangri-La and MCS, a Mongolian conglomerate that bottles exclusively for Coca-Cola, agreed to form a 75:25 joint venture to develop a 190-room hotel, residential properties, office towers and retail outlets.
Half of the investment would come from shareholder funding and the remainder from bank borrowings. Shangri-La and MCS will contribute according to the proportion of their equity interest in the venture. The development, first agreed between the companies in 2005, was delayed due to a land-use problem, according to Shangri-La chief financial officer Madhu Rao.
MCS leases the 30,000 square metre site in the heart of Ulan Bator from the government.
As part of the deal, MCS will have to transfer its land-use right to the joint venture by December.
Shangri-La said MCS has the option to raise its stake to 49 per cent.