Scotia lends Mexicans US$51m for Ja Grande hotel

Scotia lends Mexicans US$51m for Ja Grande hotel

BY STEVEN JACKSON Business reporter

Tuesday, February 10, 2015

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Financial conglomerate Scotia Group Jamaica (SGJ) revealed that it approved US$51 million (J$5.6 b) in financing to the Mexican-based Palace group to acquire the former Sunset Jamaica Grande slated to reopen in April.

Concurrently, the hotel plans to attract visitors with its grand opening party in May led by reggae star Shaggy, according to official online information.

But the loan represents a sizable amount for the conservative banking institution or roughly one-third of Scotia's new loan growth. It also gives an indication of at least partial financing for the hotel purchase which hitherto was not disclosed.

The bank "booked more than J$15 billion in new/supplemental loans. This included a US$51 million syndicated loan to the Palace Resorts Group of Mexico, for the acquisition of the 730-room property in Ocho Rios formerly known as the Sunset Jamaica Grande," stated SGJ in its annual report released this month to shareholders.

Last July, Palace Resorts assumed ownership of the property, and closed the hotel in September for extensive renovations and upgrades. It plans to reopen later in 2015 as Moon Palace Jamaica Grande. The investment marked Palace Resorts' latest expansion outside of Mexico, expanding its all-inclusive brand standards to the Jamaican market. When fully operational, the hotel aims to hire 1,020 employees.

Expansion to Jamaica formed part of Palace's five-year growth plan, management indicated at the time of acquisition. Palace presently has seven resorts in Cancun, Cozumel, Isla Mujeres and Riviera Maya, Mexico.

SGJ previously announced that it earned $10.1 billion for its October 2014 financial year or 7.0 per cent less than a year earlier due to a fall in most segment results.

Four of the five segments reported slightly lower profit year-on-year, according to the financials. These include treasury, which earned $2.4 billion profit, or 7.3 per cent less year-on-year; retail banking at $3 billion profit, or 3.2 per cent less year-on-year; investment management, with $2.5 billion profit, or 10.3 per cent less year-on-year; and insurance services, with $2.9 billion profit, or 4.6 per cent less year-on-year. The corporate banking division, however, earned higher profit at $1.7 billion, up 6.0 per cent year-on-year.

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