RENCO - Tsakhadzor Resort Center
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former Olympic ski training location is being reconstructed as a resort village.
With a wellfunctioning hotel and a mountain lodge for summer tourism and a ski lift system supporting winter vacationers, Tsakhadzor expects to boost tourism all year round. The Italian RENCO construction group, after its successful Hotel Yerevan project, is investing $5 million. Government’s participation through Lincy Foundation is expected; $6 million are being raised through private investors. Company: Tsakhkadzor Ski Resort Center Amount: $ 6,000,000 Tenor/Terms: Equity Financing — 26 % of the Company s shares Use of Funds: Ski lifting systems $11.0 mln Hotel reconstruction $ 7.9 mln Mountain hut construction $ 1.0 mln New artificial snow spraying system $ 1.6 mln Two snow cats $ 0.4 mln Equipment & Inventory $ 0.5 mln Pre-operational expenses $ 0.5 mln Legal Status: Private Company Local/Strategic Partners: General Sport Complex Tsakhkadzor CJSC (Private Company) Sales and Marketing Plan: The key marketing plan goal is to achieve highest possible level of the Ski Resort Center utilization and therefore develop a strategy that is flexible and client oriented — namely focus on all year round utilization as a resort rather than just as a skiing resort. The strategic mission of the Ski Resort Center is to become a leisure destination for local and international clients seeking affordable alternatives to Europe Therefore the marketing strategy will focus on (a) making Tsakhadzor a regionally accessible resort; (b) a cost-effective alternative to European destinations; (c) marketed aggressively in travel packages; and (d) focusing on CIS / Mid-East clients. Business Plan: Amyot Exco s consulting team prepared a business plan at the request of the management of RENCO and will assist in raising the needed financing. It contains comments of the Consultant for the proposed Ski Resort Center, including the construction works and Center launching process. It provides results of a market survey conducted and the assumptions made for the preparation of the financial statements for the period of six years. The business plan contains recommendations for possible project enlargement — developing and diversifying the skiing areas from Tsakhkadzor to Mountain Aragats and Geghama Mountains. These will make the skiing more advantageous and attractive for the ski lovers and hence, attract more foreign tourists to Armenia. Enlargement of the skiing areas throughout two other marzes (regions) of Armenia, will contribute to tourism infrastructure establishment and development, hence enhance the economic development of also the Gegharkunik and Aragatsotni regions in addition to Kotayk region. The business plan is available with Mr. Gasparini. Competition: Tsakhkadzor Ski Resort Center with its proposed ski-lift system and other offered services for hotel/accommodation would face little domestic competition. Its main competitors would be considered as Ski Resort Centers in the South Caucasus Region and those in Russia and Ukraine. Other indirect foreign competitors could include the less expensive European winter resorts. Investment, Capital Cost and Financing Structure Proposed: An investment of US$6m is needed for the construction and commissioning of the Resort Center in Tsakhkadzor. RENCO is contributing US$5m toward the overall project cost, estimated at $23m. Sources of Financing: General Sport Complex Tsakhkadzor CJSC - $12m; Renco Spa - $5m; Financial Institution - $6m. Investment Category: Ski Plant Construction — $15m — Equity Financing General Sport Complex Tsakhkadzor CJSC — $11.9m; Renco Spa - $3.1m. Hotel Reconstruction — $ 7.9m — Equity Financing Renco Spa - $1.9m; Financial Institution — $6m. Hotel Building — $ 0.1m — Equity Financing General Sport Complex Tsakhkadzor CJSC — $0.1m. Other Project Details: Given the importance of developing Armenia s tourism infrastructure, modernizing Tsakhkadzor is essential. A traditionally well-known mountain resort with relatively good infrastructure, the town of Tsakhkadzor, (population 1,500) could potentially benfit from 280 jobs that would be created. The project would contribute to the socio-economic welfare and development of Kotayk region as it is expected that foreign clients in the first year of operation would number approximately 17,000, and gross income generated from the first year of operation is forecast to be about $4.6m. Tsakhkadzor Ski Resort Center project also has future development perspectives. If the project is enlarged towards Aragatsotni and Gegharqunik regions, it will have considerable impact on the economy development of these regions as well. These planned enlargements could involve: • Constructing a heliport (for three helicopters) to organize heli - ski and heli- hiking tours towards Mount Aragats (Aragatsotni region) and Geghama Mountains (Gegharqunik region). • Constructing a mini satellite station for summer skiing at the South slope of Aragats, connected to the mother station in Tsakhkadzor by existing asphalt roads or by helicopters (10 minutes flight). Points of Contact: Mr. Rinaldo Gasparini Chairman, RENCO Or Mr. Paolo Paganucci Commercial Activities Manager v.le Venezia, 53 61100 Peasaro Italy Tel: 39-0721-433 31 Fax: 39-0721-400 924 E-mail: rencospa@renco.it Mr. Armand Pinarbasi Managing Partner Amyot Exco Armenia Grant Thornton International Vardanants 18 (Vernisage Entrance) 375010 Yerevan, Armenia Tel: 374-1-58 63 73 / 52 24 01 Fax: 374-1-58 44 19 E-mail: amyot@arminco.com Also in France: 104 avenue des Champs Elys es 75008 Paris — France Tel 331-44 70 30 03 Fax: 331-42 93 32 16 E-mail: erevan@club-internet.fr |