|HAMILTON, Bermuda, April 1, 1999 - Sea Containers
Ltd.'s Orient-Express Hotels Ltd. subsidiary has joined with Peru Hotel
S.A. to acquire Peru's leading tourist center hotels, the Hotel Monasterio
del Cusco in Cusco, and The Machu Picchu Ruinas Hotel at the Machu Picchu
Inca sanctuary. The 123 room Monasterio is a 5 star property, created through
the transformation of a 17th century Spanish monastery, located only a
few paces from Cusco's famous central square. The church within the hotel
is a tourist attraction in itself, containing paintings and sculpture of
the highest artistic standard. The rooms are built around four cloisters
on a 1.8 acre site.
The Machu Picchu Ruinas Hotel, while only 3 star standard at the moment, is the only hotel permitted within the Machu Picchu sanctuary. It has 32 rooms and extensive food and beverage operations which provide luncheons to most visitors to the sanctuary.
In addition to these properties, the 50/50 joint venture company acquiring these properties has also acquired the Nazerenas Convent which adjoins the Monasterio Hotel. This 1.3 acre site has recently been vacated by a school and will be transformed into additional rooms, gardens and pool for the combined properties. Both the Monasterio and Nazerenas sites are leased for long periods from the Catholic Church.
Furthermore, the joint venture has acquired at Machu Picchu, also on long lease, a 7.5 acre site in the valley floor next to the river, on which it intends to build a number of 5 star quality additional hotel rooms to supplement the Ruinas Hotel which is today fully booked, year round.
Orient-Express Hotels Ltd. will manage all these properties.
Mr. Simon M.C. Sherwood, President of Orient-Express Hotels Ltd., said the Orient-Express will invest US$10 million for its 50% stake in the joint venture and has agreed to lend $5 million for improvements to the properties. Additional capital investment will be funded with bank finance.
Mr. Sherwood said that the fundamentals for Peru's tourism had changed significantly in the last 10 years under the Fujimori government. Political unrest has now been eliminated, standards of living are rising rapidly and Peru is not only encouraging foreign investment but has maintained a responsible fiscal policy, with foreign exchange reserves equal to total government debt. New roads and airports have been built and tourism has been recognized as one of the country's great assets. Cusco, although a 17th century Spanish colonial city, sits below the ancient Inca capital of Saqsaywaman with extensive remains.
Machu Picchu is about 75 miles from Cusco, reached through the dramatic Sacred Valley of the Incas which winds its way through the pinnacles of the Andes. Machu Picchu is on the Amazon side of the Andes and appears to have been a religious sanctuary for the many Inca tribes.
The foundations of Saqsaywaman, Machu Piccu and the famous Nazca Lines in the desert south of Lima, are believed to have their origins in a forgotten civilization predating the birth of Christ. The Incas are thought to have built their temples on the foundations of this earlier civilization.
Mr. James B. Sherwood, President of Sea Containers Ltd., said that the Peruvian investment was the company's second in South America, the first being the highly successful Copacabana Palace Hotel in Rio de Janeiro. Other hotel and restaurant investments in South America are currently under consideration. Mr. Sherwood said that the Peruvian investment met Sea Containers criteria in that growth in tourism to Peru should increase enormously in the years ahead and the Monasterio and Ruinas properties hold considerable scope for expansion. He said that Sea Containers is also looking at rail opportunities in Peru.
"Sea Containers has for 35 years now been primarily a marine container leasing business but in the early 1990s the board decided to build marine and rail passenger transport and hotel, restaurant and river cruising into its major activities. In 1999 approximately two thirds of the group's profits will come from passenger transport and hotels. Through astute purchasing of leisure properties over the years, the current market value of our leisure assets now substantially exceeds book value," Mr. Sherwood said.
This press release contains, in addition to historical information, forward-looking statements that involve risks and uncertainties. These include statements regarding future earnings, capital expenditure and investment plans, market expectations and similar matters that are not historical facts. Such statements are based on management's current expectations and are subject to a number of uncertainties and risks that could cause actual results to differ materially from those described in the forward-looking statements. Factors that may cause such a difference include, but are not limited to, those mentioned in the press release, customer demand and competitive considerations, changes in tourism levels and travel patterns, changes in the values of leisure assets, interest rate and currency value fluctuations, changes in investment proposals or their terms, adequate sources of capital and acceptability of finance terms, global and regional economic conditions, and legislative, regulatory and political developments. Additional information regarding these and other factors is included in the company's reports filed with the U.S. Securities and Exchange Commission.
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