Creation of JV with that country's state pension fund manager is on cards
HOTEL Properties Ltd (HPL) has forged an agreement with Libya's state pension fund manager to rebuild and refurbish hotels in the country, a deal achieved partly thanks to 'middleman' Philip Yeo.
Stephen Yeo, executive vice-president of HPL, said on Wednesday evening at a press conference here that many details have yet to be firmed up. But on the cards is the creation of a 50-50 joint venture company with Libya's Social Security Fund Investments Company (SSFI), which manages three to four billion Libyan dinars (S$3.5 to 4.7 billion) in assets, to refurbish Tripoli's Al Kadir hotel to five-star standard for US$30 million.
Boosting ties: SM Goh (left) with Col Gaddafi in Tripoli yesterday. He met the Libyan leader for what Mr Goh called an 'illuminating discussion' lasting almost an hourOther projects include the building of a 50-storey mixed-use tower in Tripoli for around 150 million euros (S$317.5 million), and the redevelopment of a hotel in Benghazi city, according to SSFI chairman Issa Tuwegiar. SSFI manages 23 hotels, resorts and tourism villages in Libya on behalf of Libya's pension fund.
Hexagon Development Advisors - a consultancy headed by the former EDB and A*Star chief Philip Yeo - helped Ong Beng Seng's HPL clinch the deal. Mr Yeo is now chairman of Spring Singapore.
The main shareholders of Hexagon - a company set up in February 2007 - are Reef Enterprises, believed to be an HPL outfit, and Ellington Investments, which focuses on energy and power industries. Through his own firm P*Yeo Investments, Mr Yeo has shares in Hexagon. The consulting firm's senior people include other former EDB officers.
Mr Yeo and Mr Ong are understood to have visited Libya more than once in the past year and have built up a relationship with the Libyan Economic Development Board, a government body inspired in part by its Singapore counterpart.
A joint HPL-Hexagon delegation visited Libya last September to discuss business deals, according to David Ban, Mr Ong's associate and a consultant at Hexagon who was present at the signing of a memorandum of understanding on Wednesday night.
SSFI's Mr Tuwegiar said HPL's expertise in tourism and hospitality is particularly welcome and the agreement was secured quickly, within a few months. HPL has interests in 23 hotels worldwide and has developed numerous luxury residential properties. It also owns shopping and commercial properties plus the Hard Rock cafe franchise in the Asia-Pacific region.
Yesterday morning, Senior Minister Goh Chok Tong met Libyan leader Colonel Muammar Gaddafi for what Mr Goh called an 'illuminating discussion' lasting almost an hour.
Mr Goh told reporters that he was interested in finding out the future direction of the Libyan economy. 'Unless you are sure of the clarity of the direction of the Libya economy it will be a bit difficult for us to consider investing in the economy in the big way,' he said.
Afterwards, Mr Goh met Libyan Prime Minister Al Bugdady Ali Al-Mahmoudi and witnessed the signing of a memorandum of understanding to further economic cooperation between the two countries. Singapore businessmen remain worried that shifting rules and regulations in Libya could hurt their investments and Mr Goh said he had transmitted these concerns to the Libyan leaders.
Libya has only recently come out of international isolation after United Nations and US sanctions were lifted.
The country has large reserves of oil and gas, as well as 1,800km of coastline and many heritage sites, including Leptis Magna, an impressive Roman ruin that is largely unexcavated.
This has led to a rapid influx of foreign businessmen and tourists, which the country's infrastructure is struggling to cope with. Libyan government officials say they may need as many as 40,000 more hotel rooms to meet the surge in demand, as there are only about 12,000 rooms at present. Only one hotel is said to be of five-star standard and even then its facilities - for example, Internet access - are still patchy.
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