Occidental MEX

completed

The project is aimed at spinning off four Occindental''s hotels in Mexico in one company (the company) that will become the main vehicle for Occidental''s future developments in Mexico and in the region. Occidental will contribute four hotels and IFC will help raise the necessary debt financing and invest a further $10 million in quasi-equity. Once the company has been properly financed, FONATUR, Mexico’s tourism development agency, will consider becoming a minority shareholder in the company through the contribution of hotel assets or plot of land suitable for hotel development.Through the proposed investment IFC will support the establishment of what is likely to become an important regional hotel company in Mexico and Central and South America, following a market downturn. IFC will provide a financing package with long maturities which the market cannot provide and will help put the company on a sound long term footing. Also, IFC’s proposed participation is key to help structure the project and raise complementary financing. In addition, IFC has played an important role by encouraging Occidental to review its fire & safety standards for its whole hotel portfolio, and has led Occidental to a new program of developing a comprehensive and high impact corporate risk management system aimed at identifying and mitigating environmental, fire & safety and sustainability risks related to the management and development of hotel operations.In the long term, IFC’s involvement will support the efforts of the Mexican government to leverage the assets of FONATUR by entering into joint ventures with the private sector. In this context, IFC will play a honest broker role between Occidental, a foreign company, and FONATUR, a government agency. IFC’s participation will also help ensure that all properties owned by the Company will comply with IFC and WBG environmental, social and life and fire and safety policies and guidelines.