Hotel Forest Inn Limited, located at Nagarjuna Danda in Budhanilkantha, is planning to launch an IPO to reduce its growing debt. The company has received a ‘BB–’ rating from Infomerics Credit Rating Nepal. This rating shows that the company has moderate credit risk. In simple terms, it means the hotel may face some difficulty in paying its loans, especially during tough times, but it is not yet in serious trouble.
The hotel is supported by Nepal’s Energy Minister Deepak Khadka. It runs in partnership with the international hotel chain Intercontinental Hotels Group (IHG). Even though the hotel had a low occupancy rate of just 26%, it still made Rs 13.6 crore in income during the fiscal year 2082 BS.
To improve its finances, the company plans to issue 40 lakh shares to the public, aiming to raise Rs 40 crore. The hotel has long-term debt of Rs 2.11 arba and a short-term loan of Rs 5 crore. This short-term loan has been given an A-Fo rating, which means it is considered low risk for now.
The hotel sits on 1.24 hectares of land and has 104 rooms. It hopes to grow by using its good location, global brand name, and experienced team. But it still faces some major challenges, like high debt, low profits, and relying on just one hotel for income.
Binita Thapa, wife of Minister Deepak Khadka, holds 32% ownership in the company.
What does a ‘BB–’ rating mean?
A ‘BB–’ rating suggests moderate risk. It’s below investment grade, often called “junk” status in financial terms. Companies with this rating are more vulnerable to financial difficulties, especially in uncertain markets, but are not yet considered highly risky or in default.
