Vantage Capital (www.VantageCapital.co.za), Africa’s largest mezzanine debt fund manager, is pleased to announce that it has fully exited its investment in PickAlbatros Hotels, a leading Egypt-based hotel owner and operator with an extensive portfolio of 4-star and 5-star hotels located across the Red Sea area in Sharm El Sheikh, Hurghada, Sahl Hasheesh and Marsa Allam. The hotels feature beachfront access, fitness clubs, water parks and swimming pools.

Vantage provided the hotel group with $18.4 million in December 2020, in the midst of the Covid-19 pandemic when Egypt’s hospitality industry was under severe strain. The funds were used to cover working capital requirements as well as renovation work on some newly acquired hotels, enabling the group to continue operating smoothly despite a sharp reduction in tourist numbers.

David Kornik, Partner at Vantage Capital, noted, “our investment in PickAlbatros Hotels is a model story for the value proposition of mezzanine debt – we took a pragmatic commercial view that the hospitality sector would recover post-Covid and were willing to support a strong underlying business at a time when banks were too risk averse. It worked well for the hotel group, with PickAlbatros accessing the funding it needed in a difficult period, and it was then able to repay us in an orderly manner once the hospitality sector recovered.”

Omar Gharbawi, Associate Partner at Vantage Capital, added, “with 15 million international tourists per year, Egypt’s hospitality sector is crucial to the country’s economic growth and remains a core source of hard currency. PickAlbatros has played an important role in contributing to tourism growth in the region and we are proud to have partnered with one of the biggest hotel players in the Red Sea. Thanks to the significant efforts of the group’s founder, Mr Kamel Abu Ali, resort towns such as Hurghada are now firmly on the map as a popular destination for European tourists. Our investment into the group has been a resounding success, with room capacity having expanded from 10 000 to 14 000 keys over the past 3 years.”