Cravings Equity

active

PThe Cravings Group (TCG Holdings Inc.; referred herein as “TCG” or the “company”) is a Philippine holding company which presently operates a network of culinary and hospitality schools that provide training to students seeking to enter the hospitality sector; a chain of restaurants and coffee shops; and business hotel operations in the Philippines (http://www.tcgphil.com). TCG has plans to make additional investment for expansion of its present activities in the Philippines as described below (the “Project”). To support the project, IFC is considering an equity investment in the company.TCG has a chain of culinary training schools under the ASHA and CCA brands, specifically training “front-of-the-house” staff for hotels, restaurants, resorts, and other tourism industry service providers. TCG presently has about 4,700 students (2,150 in CCA and 2,550 in ASHA) students enrolled across its 14 operational training schools and plans to expand the capacity up to 10,500 students by 2016. The existing schools are located in TCG owned buildings and are comprised of classrooms for students, rooms for practical training, library and meetings rooms. The average floor area for such schools is 1,000 square meters typically spanning over 3 floors. A few school buildings are adjoining the TCG inn-keeping facilities where students are exposed to actual ‘hotel management’ experience. TCG will develop new schools in company owned buildings (developed either as a green-field or modification of an existing building) across different locations in the Philippines. The land required for these buildings will be purchased through market-based willing-buyer-willing-seller or leased through lessor-lessee transactions. TCG operates a chain of coffee shops under “The Coffee Beanery” and TCB brand and restaurants under the “Craving’s”, “C2 Classic Cuisine” brands. Most of these restaurants and coffee shops are located in the leased premises in shopping malls in and around Metro Manila. TCG presently operates 10 such coffee shops and 28 restaurants. TCG plans to add 20 new coffee shops and 16 restaurants in next few years. An average area for such a coffee shop/restaurant is 50 - 150 sqm Expansion of new coffee outlets and restaurants will follow similar pattern. Further, in order to standardize and establish an effective brand value for its products particularly the bakery and organic products, TCG plans to establish a centralized food storage and production facility (“Commissary”) in Quezon City. The Commissary will supply TCG branded bakery and organic food products across all its coffee shops and restaurants. As part of its inn-keeping business, TCG presently operates 3 budget hotels in Metro Manila (such as Seven Suites, Antipolo; The Orange Place Quezon City and San Juan) and is developing a boutique hotel in Makati. TCG plans to develop 2 budget hotels in the next few years in the key cities of the Philippines. The budget hotels / inn keeping facilities of TCG are located in company owned buildings. The hotel buildings are new structures as well as modification of existing buildings, depending upon the area where they have been acquired by the company. TCG will continue to follow similar pattern for its hotel expansion activities. For its coffee shops, TCG presently sources the coffee beans from international suppliers and has a consumption of around 2 tons per month. As part of the proposed project, TCG plans to develop its own coffee bean and cacao growing plantation facility over 3,000 hectares of farmland that it owns in Bukidnon province in the Northern Mindanao region (located in southern part of the country).