Formosa to spend $60 mln to expand

Bloomberg

"The opportunity in Taiwan, at least for the next three years, is going to be a lot better than anywhere else in the world," Chairman Steven Pan, 44, said in an interview late yesterday. "It’s too good to be true, I cannot believe it."

Formosa Hotels, planning to spend NT$2 billion ($60 million) on its expansion, is betting Taiwan and China will let individual mainland tourists visit the island within a year. Current rules only allow tour groups. The two sides agreed on April 26 to expand weekly flights across the Taiwan Strait after visitors from China doubled in March.

Taipei-based Formosa Hotels plans a syndicated loan from local banks to fund expansion to as many as seven hotels from the two it now has. Capacity will increase to about 2,000 rooms within three years from the current 750, Pan said. Formosa Hotel’s shares climbed 0.5 percent to NT$428 in Taipei today, outpacing a 0.1 percent gain in the benchmark Taiex index. The shares have advanced 31 percent this year, lagging a 43 percent climb in the Taiex.

Taiwan’s government plans to spend NT$30 billion over the next four years to promote tourism and expects to attract NT$200 billion of private investment, the Cabinet said April 9. The government may offer residency to Chinese and other foreign investors to attract funds, the financial regulator said yesterday.