IDB Invest and Blue Like an Orange invested US$50m in mezzanine financing in Selina, a Panamanian travel hospitality network with community vacation properties across Central America. IDB Invest will contribute US$35m and Blue Like an Orange the remaining US$15m. The Abraaj Group led a US$95m round in 2018.
(Press Release) – IDB Invest, a member of the IDB Group, provided a $50 million mezzanine facility for Selina, the global chain of lifestyle hotels, to support the continuity of its expansion plans in Latin America and the Caribbean.
IDB Invest’s financing, which includes funds mobilized from Blue like an Orange Sustainable Capital, will allow Selina to enhance its liquidity during the COVID-19 pandemic, expand its geographic presence in Latin America and the Caribbean, and incorporate innovative concepts and amenities across its property portfolio. Tourism is a major contributor to economies and features high development income and in the context of the pandemic, tourism companies require liquidity to embrace the gradual recovery of the sector.
“We will aim to support Selina’s disruptive business model and its growth potential in Latin America and the Caribbean, especially in a post-COVID environment. Upcycling existing inventory into vibrant lodging concepts, that feature co-working spaces and highly-amenitized entertainment areas, represents a different value proposition. The ability to attract foreigners and locals alike makes the concept unique and authentic and contributes to our sustainable tourism development strategy to the region”, explained Rogerio Basso, Head of Tourism of IDB Invest.
Selina generates employment opportunities for local artisans, offers training to vulnerable groups, and promotes the inclusion of micro, small and medium-sized enterprises into its value chain. The global chain operates 80 lifestyle hotels worldwide, 60 of those in 12 countries in Latin America and the Caribbean. Its business model consists of generating a more efficient use of spaces by converting underperforming properties into modern hotels, that feature a mix of private and communal accommodations, dedicated co-working areas and locally curated food and beverage concepts.
Furthermore, each property is developed using recycled or up-cycle materials for construction and decoration and several properties are in rural areas, that had limited international tourism prior to Selina’s entrance. The company has adapted to the COVID-19 crisis by being focus on more efficient operations, longer-term stays and its newly launched subscription model.
“We’re excited to partner with IDB, who are at the forefront of implementing development growth and social change in Latin America and the Caribbean. IDB’s investment in Selina will provide the company with significant funding and resources as we continue to grow and operate in Latin American and the Caribbean. And, perhaps more importantly, IDB is the perfect partner for Selina in its ongoing mission to give back to the local communities in which we operate and to improve lives throughout the region” said Rafael Museri CEO & Co-Founder of Selina
IDB Invest’s mezzanine financing consists of a $35 million loan from IDB Invest resources and the mobilization of a US$15 million B-Loan from Blue Like an Orange Sustainable Capital. This is the third joint operation between the two institutions, as part of a co-financing framework agreement to catalyze investments with high-development impact in the region. The transaction also serves as a reference on how to model and structure other similar tourism deals across the region’s fast-growing lifestyle accommodation segment.
Through this transaction, IDB Invest demonstrates its commitment to reactivating sustainable tourism across the region. In the context of the COVID-19 crisis, the recovery of tourism destinations and local communities will be supported by lodging operators like Selina, capable of attracting so-called “digital nomads” and recognizing the likely changes in geographic flexibility for workers post-pandemic.
