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Abraaj Capital targets prime land in Lahore
BY MUZAFFAR RIZVI
8 July 2007
DUBAI — Abraaj Capital Limited, the private equity firm which is managing more than $4 billion assets, will bid for prime land in Lahore to build and operate a high-rise state-of-the-art five star hotel in the provincial capital of Punjab, Pakistan.
The Dubai-based equity firm will face prominent local business and hotel groups as well as a Kuwaiti company in the bidding competition, which is scheduled to be held on July 26.
"The Privatisation Commission of Pakistan will hold bidding for land sale of Services International Hotel in Islamabad on July 26," says an official statement.
"Pakistan's Minister for Privatisation and Investment Zahid Hamid will supervise the bidding process," the statement said.
The commission has already received seven Expressions of Interest (EoIs) from interested parties with non-refundable processing fee of $5,000 or equivalent in Pak rupees.
These include Abraaj Capital Limited (UAE), Al Sabaiea National General Trading and Contracting Company (Kuwait), Associated Group (Lahore), The City Group (Islamabad), Hashwani Hotels Limited (Islamabad), Rupali Polyester Limited (Lahore) and Marwat Enterprises, Lahore.
The interested parties were further asked to submit earnest money amounting to Rs100 million latest by July 23.
Abraaj Capital is a leading private equity firm in the region and has completed three acquisitions during last month — two in Egypt and one in the UAE. The firm recorded some successful transactions to its credit in the history of leveraged acquisitions across the Middle East, North Africa and South Asian region.
According to a senior government official, the privatisation commission will hold the bidding with a commitment from the successful bidder to build, own and run a five-star hotel on a prime piece of land on Shahrah-e-Quaid-e-Azam, Lahore. The prime land presently titled as "Services International Hotel", is occupying an area of over 15 kanals.
The privatisation commission invited fresh EoIs from financially-sound international organisations with operating experience, individuals or consortium of investors in this regard.
The successful bidder would have to construct a five-star hotel including basements in accordance with the building regulations of Lahore Development Authority (LDA).
According to details, the permissible height of the hotel building shall be 400 feet. The allowable floor area ratio shall be 1:12. The coverage at ground floor shall be permissible after leaving 50 feet house line towards Shahrah-e-Quaid-e-Azam, 13 feet wide space at three sides including the rear side of the building.
Up to 20 per cent of the total covered area would be for commercial area with the condition that only 5 per cent of this area would be used for shops while the remaining 15 per cent would be dedicated for offices. The successful bidder shall have to construct a five-star hotel within a three-year period.
The successful bidder shall submit a Performance Bank Guarantee equivalent to 15 per cent of the bid price. The privatisation commission shall have the legal right to en-cash the bank guarantee if the successful bidder fails to achieve the agreed construction milestones.