UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 or 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of: September 2024
Commission File Number: 001-41985
Murano Global Investments PLC
(Translation of Registrant’s name into English)
25 Berkeley Square, London W1J 6HN
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of
Form 20-F or Form 40-F.
☒ Form 20-F ☐ Form 40-F
Contents
In connection with a private placement of debt securities by one of its subsidiaries, MURANO GLOBAL INVESTMENTS PLC (“Murano PubCo”) anticipates disclosing to prospective
purchasers certain information about Murano PubCo and its subsidiaries (including Murano PV, S.A. de C.V.) that has not been previously publicly reported.
The contemplated private placement is expected to be made under Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”), and the debt securities will be
sold only to qualified institutional buyers and to offshore investors in transactions exempt from registration under Rule 144A and Regulation S under the Securities Act. No assurance can be made that any private placement of debt securities will be
completed.
Murano PubCo has elected to provide this information in this Report on Form 6-K in the attached Exhibits 1 and 2 for informational purposes.
This report does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale of any securities in any jurisdiction in
which such offer or sale would be unlawful.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Murano Global Investments PLC
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(Registrant)
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Date: September 4, 2024
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By:
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/s/ David Galan | |
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Name: David Galan
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Title: Chief Financial Officer
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EXHIBIT INDEX
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EXHIBIT NO.
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EXHIBIT DESCRIPTION
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Certain information with respect to Murano PubCo and its subsidiaries.
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Condensed, consolidated and combined interim financial statements of Murano PV, S.A. de C.V. and subsidiaries as of June 30, 2024 and for the six-month periods ended June 30, 2024 and 2023 (“Murano Group 2024 Interim Financial Statements”).
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iv
EXHIBIT 1
v
SUMMARY
Nafin's commitment
On August 27, 2024, Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo ("Nafin") issued a commitment letter in favor of Murano PV, S.A. de C.V. ("Murano PV"), for a
financing facility of up to U.S.$80 million. This commitment is intended to assist Murano PV with its working capital needs and compliance with its financial obligations, subject to the repayment in full of the that certain syndicated
secured mortgage loan facility dated October 4, 2019 (as amended, supplemented, and/or restated form time to time, including on July 11, 2022, August 24, 2023 and December 20, 2023) (the "GIC I Loan") and other customary conditions
precedent. We believe that Nafin's commitment letter reinforces our liquidity and short-term financial stability, in furtherance of the fulfilment of our business strategy.
ESAGRUP loans
On April 30, 2024, E.S. Agrupación, S.A. de C.V. ("ESAGRUP"), as lender, granted a loan to Murano World S.A. de C.V. (a subsidiary of Murano PV) (“Murano World”), as borrower, in the amount of Ps.$317,000,000
(the “ES Loan”). The ES Loan bears interest TIIE 28 plus spread of 3% and has a 24-month maturity. The entering into the ES Loan by Murano World resulted in a covenant breach under the GIC I Loan, which prohibits the incurrence of
indebtedness by Murano World in excess of U.S.$9 million. Although we believe the covenant breach will be cured upon conversion of the loan into equity in due course, Murano World remains in breach of a covenant under the GIC I Loan, and
Murano PV, Murano World, Edificaciones BVG, S. A. de C. V., Fideicomiso Murano 6000 CIB/3109, Inmobiliaria Insurgentes 421, S. A. de C. V., Operadora Hotelera G.I., S. A. de C. V., Operadora Hotelera Grand Island II, S. A. de C. V.,
Operadora Hotelera I421, S. A. de C. V., Operadora Hotelera I421 Premium, S. A. de C. V., Fideicomiso Murano 2000 CIB/3001, Fideicomiso Murano 4000 CIB/3288 (the "Murano 4000 Trust"), Fideicomiso Murano 1000 CIB/3000, Servicios Corporativos
BVG, S. A. de C. V., and Murano Management, S. A. de C. V. (collectively, the "Murano Group" or the "Group") has not formally requested, and does not intend to formally request, a waiver of this breach from the lenders under the GIC I Loan
at this point. We cannot assure you, however, that any future waiver, if requested, for any future breach under similar circumstances or otherwise will be obtained.
On May 20, 2024, Murano World, as lender, granted a loan of up to U.S.$1.85 million to ESAGRUP, as borrower, with a one-year maturity at an interest rate of SOFR 91 days plus a margin of 3%. The entry into
this loan agreement by Murano World resulted in a covenant breach under the GIC I Loan, which prohibits the granting of loans by Murano World. The Murano Group has not formally requested, and does not intend to request, a waiver from the
lenders under the GIC I Loan at this point. We cannot assure you, however, that any future waiver, if requested, for any future breach under similar circumstances or otherwise will be obtained.
Sofoplus and Exitus loans
On July 11, 2024, Exitus Capital, S.A.P.I. de C.V., SOFOM, E.N.R. ("Exitus") and Sofoplus, S.A.P.I. de C.V., SOFOM, E.R. ("Sofoplus") executed a letter agreement related to the irrevocable administration and
alternative source of payment trust agreement (contrato de fideicomiso irrevocable de administración y fuente alterna de pago) number 250C dated May 31, 2022 (the "250C Trust") (which secures the
secured term loan between ESAGRUP and Elías Sacal Cababie as joint and several obligors and Sofoplus, as lender, in an aggregate amount of U.S.$15,000,000 at a fixed interest rate of 15%, and maturing on June 24, 2025 (as amended,
supplemented and/or restated from time to time) (the "Sofoplus Loan") and one of the Exitus loans) whereby they agreed to revert the rights with respect to any and all cash flows previously conveyed to the estate of the 250C Trust in favor
of ESAGRUP, Elias Sacal Cababie and Marcos Sacal Cohen, as the settlors and extinguish the conveyance of such cash flows to the 250C Trust estate.
Additional Equipment under the Coppel, S.A.P.I. de C.V. lease agreement
On July 30, 2024, Operadora Hotelera G.I., S.A. de C.V. ("Operadora GIC I") leased additional equipment under the equipment lease agreement, dated as of November 8, 2023, among the Operadora GIC I, as lessee,
Arrendadora Coppel, S.A.P.I. de C.V. ("Coppel"), as lessor, and Murano World, Edificaciones BVG, S.A. de C.V. and Elias Sacal Cababie, as joint and several obligors (the "Coppel Lease Agreement") to be used in the Grand Island Cancun Hotel
(the "GIC I Hotel"), for a 60-month period, with Coppel for total rent payments of Ps.$40.2 million (U.S.$2.2millon) plus 16% of VAT.
Waivers under certain financing agreements
In recent months, Murano Group has not met certain covenants under its financing agreements but believes it has been working diligently with its lenders to obtain waivers for these breaches and in an effort
to enable Murano to implement its long-term financing strategy:
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Delivery of certain audited and unaudited financial information
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Under certain of its financing agreements (including the the loan agreement dated September 29, 2022 (as amended, supplemented and/or restated from time to time) entered by Inmobiliaria
Insurgentes 421, as borrower, Operadora Hotelera I421, S. A. de C. V. and Operadora Hotelera I421 Premium, S. A. de C. V., as joint obligors, and Sociedad Nacional de Crédito, Institución de Banca de Desarrollo ("Bancomext"), as lender, in
an aggregate amount of U.S.$100,000,000 at an interest rate of term SOFR +3.50%, and maturing on October 7, 2037 (the "Insurgentes 421 Loan") and the GIC I Loan), Murano Group is required to deliver financial information to its lenders
periodically, including unaudited and audited financial statements. The business combination effected through the amended & restated business combination agreement, dated as of August 2, 2023 (the "Business Combination") and subsequent
listing of Murano Global Investments PLC ("Murano PubCo") on Nasdaq on March 21, 2024, led to certain delays in meeting these reporting obligations with respect to certain subsidiaries and the Murano Group has been working with its lenders
to address such situation.
On August 26, 2024 the Murano Group received a waiver from Banco Nacional de Comercio Exterior, Bancomext under the Insurgentes 421 Loan to defer delivery of the 2023 annual audited
financial statements of certain subsidiaries, as applicable, until September 30, 2024. Murano Group cannot assure you that any future waiver, if requested, for any future breach under similar circumstances or otherwise will be obtained or
that the Murano Group will be able to deliver the applicable financial statements in accordance with the timelines required.
On August 29, 2024 a waiver was received from the lenders under the GIC I Loan to defer delivery of the 2023 annual individual and consolidated audited financial statements of certain
subsidiaries, as applicable, until October 31, 2024. Murano Group cannot assure you that any future waiver, if requested, for any future breach under similar circumstances or otherwise will be obtained.
Murano Group delivered its unaudited financial information for the period ending March 31, 2024 to its lenders after the reporting date required under such financing agreements. Murano
Group cannot assure you that a waiver, if requested, for any future breach under similar circumstances or otherwise will be obtained. For the period ended June 30, 2024, Murano Group delivered its unaudited financial information on time as
required by the financial agreements.
1
| (b) |
Funding of debt service reserve accounts, interest rate coverage, and quarterly interest payment under the GIC I Loan
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On May 8, 2024 and on June 8, 2024, respectively, Murano Group failed to fund the debt service reserve account of the Insurgentes 421 Loan as required under the loan documentation. As a
result, a covenant breach occurred. On June 26, 2024, Murano Group funded the debt service reserve account to cure the covenant breach and on July 8, 2024, it made the corresponding quarterly principal and interest payment with proceeds of
the debt service reserve account. As of June 30, 2024, a covenant breach persisted with respect to the funding of the debt service reserve account of the Insurgentes 421 Loan, as Murano Group did not fund the debt service reserve account on
the due date. However, on August 26, 2024, Murano Group received a waiver from Bancomext under the Insurgentes 421 Loan to defer the next funding of the debt service reserve account and the additional debt service reserve account as
follows: (a) the debt service reserve account should be funded with an amount equivalent to one third of the quarterly amortization under such loan no later than September 17, 2024; subsequently, the remaining amount should be funded no
later than September 30th, 2024, and (b) the additional debt service reserve account should be funded in its entirety no later than October 4th, 2024. We cannot assure you, however, that any future waiver, if
requested, for any future breach under similar circumstances or otherwise will be obtained.
On May 1, 2024, and August 1, 2024, respectively, Murano Group failed to fund the debt service reserve account of the GIC I Loan as required under the loan documentation (3 months of
interest). As a result, a covenant breach occurred. On May 14, 2024, the Group received a waiver from the lenders to defer the funding of the debt service reserve account until June 1, 2024, and on June 20, 2024, the Group received an
additional waiver to defer such funding until August 1, 2024. After that date, the covenant breach persisted as Murano Group did not fund the debt service reserve account on the due date. On August 5, 2024, Murano Group also failed to pay
quarterly interest due under the GIC I Loan. As a result, a further covenant breach occurred. However, on August 29, 2024, Murano Group received waivers from the lenders under the GIC I Loan to (i) fund the debt service reserve account, and
(ii) pay the quarterly interest due on August 5, 2024 under the GIC I Loan, until October 31, 2024. Consequently, these events of default have been temporarily waived. We cannot assure you, however, that any future waiver, if requested, for
any future breach under similar circumstances or otherwise will be obtained.
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Hedging Obligations
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On June 1, 2024, we failed to expand the interest rate coverage to maintain such coverage for an amount equivalent to at least 70% of the outstanding balance of tranche A of the GIC I Loan,
for at least 50% of the remaining term until the maturity date, which resulted in a covenant breach under the GIC I Loan. However, on August 29, 2024, Murano Group received a waiver from the lenders under the GIC I Loan to expand the
interest rate coverage to maintain such coverage for an amount equivalent to at least 70% of the outstanding balance of tranche A, for at least 50% of the remaining term until the maturity date until October 31, 2024. Consequently, this
event of default has been temporarily waived. We cannot assure you, however, that any future waiver, if requested, for any future breach under similar circumstances or otherwise will be obtained.
2
Summary of the condensed consolidated and combined statement of profit or loss for the six-month period ended June 30, 2024 compared to the six-month period Ended June
30, 2023.
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For the six months ended June 30,
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2024
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2023
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Revenue
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$
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267,493,096
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$
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107,345,787
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Direct and selling, general and administrative expenses:
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Employee Benefits
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143,228,829
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76,418,979
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Food & beverage and service cost
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43,845,033
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30,780,790
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Sales commissions
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11,668,788
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3,922,916
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Management fees to hotel operators
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8,010,977
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2,269,267
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Depreciation and amortization
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127,058,666
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63,350,256
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Property tax
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5,282,979
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9,780,872
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Professional fees
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109,920,067
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37,236,737
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Maintenance and conservation
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22,791,467
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4,526,294
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Utility expenses
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23,972,119
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6,461,275
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Advertising
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27,780,601
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8,236,255
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Donations
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3,390,680
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5,951,130
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Insurance
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8,664,284
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4,121,519
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Software
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3,918,014
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4,506,780
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Cleaning and laundry
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6,185,705
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4,127,309
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Supplies and equipment
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11,325,580
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468,300
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Bank commissions
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13,890,855
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2,413,473
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Other costs
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40,219,551
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39,529,769
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Total direct and selling, general and administrative expenses
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$
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611,154,195
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$
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304,101,921
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Interest income
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7,655,701
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2,029,494
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Interest expense
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(238,020,003
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)
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(137,796,876
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)
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Exchange rate income, net
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(527,046,262
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)
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678,078,298
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Changes in fair value of financial derivative instruments
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3,250,047
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(23,903,466
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)
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Other income
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14,617,392
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9,350,566
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Other expenses
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(4,993,947
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)
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(156,974
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)
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(Loss) profit before income taxes
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$
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(1,088,198,171
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)
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$
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330,844,908
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Income taxes
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1,135,109
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23,368,578
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Net (loss) profit for the period
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$
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(1,089,333,280
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)
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$
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307,476,330
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Revenue: Revenue amounted to Ps.$267.5 million for the six-month period ended June 30, 2024, an increase of Ps.$160.1 million or 149.2% from Ps.$107.3 million from the six-month period ended June 30,
2023. The increase is mainly attributable to the Group's efforts to stabilize the early performance of the 416 room hotel and ancillary facilities consisting of the Andaz Hotel and the Mondrian Hotel in the property identified as “Conjunto
Aristos” located at Avenida Insurgentes Sur No. 421, Colonia Hipódromo Condesa, Alcaldía Cuauhtémoc, postal code 06100, Mexico City (the "Insurgentes 421 Hotel Complex"). The Andaz Mexico City Condesa's (the "Andaz Hotel") revenue for the
six-month period ended June 30, 2024 was Ps.$125.4 million, comprised mainly of: (1) Ps.$78.0 million in room income and (2) Ps.$39.6 million in food and beverage income compared to (1) Ps.$18.9 million room income and (2) Ps.$22.4 million food
and beverage income for the six-month period ended June 30, 2023. The Mondrian Mexico City Condesa's (the "Mondrian Hotel") revenue for the six-month period ended June 30, 2024 was Ps.$76.2 million, comprised mainly of: (1) Ps.$58.0 million in
room income and (2) Ps.$14.6 million in food and beverage income compared to (1) Ps.$34.4 million of room income, (2) Ps.$25.5 million of food and beverage income for the six-month period ended June 30, 2023. Also, on April 1, 2024, the Hyatt
Vivid Grand Island in Cancun (the "Vivid Hotel") started operations and during the second quarter of 2024, it recognized Ps.$65.5 million in revenue.
Employee Benefits: Employee benefits amounted to Ps.$143.2 million for the six-month period ended June 30, 2024, an increase of Ps.$66.8 million or 87.4% from the six-month period ended June 30, 2023.
The increase is mainly attributable to the recruitment of 375 employees to carry out the operations of the Vivid Hotel at the beginning of 2024.
3
Food & beverage and service cost: Food & beverage and service cost amounted to Ps.$43.8 million for the six-month period ended June 30,
2024, an increase of Ps.$13.1 million or 42.4% from the six-month period ended June 30, 2023. This increase corresponds to the increase in food and beverage revenue from the Insurgentes 421 Hotel Complex and also to the opening of the Vivid Hotel
during the second quarter of 2024.
Sales commissions: Sales commissions amounted to Ps.$11.7 million for the six-month period ended June 30, 2024, an increase of Ps.$7.7 million or
197.5% from the six-month period ended June 30, 2023. An increase in reservations through online travel agencies mainly relates to the Andaz Hotel, which for the six-month period ended June 30, 2024 incurred Ps.$8.4 million in sales commission
costs compared to Ps.$2.5 million for the same period in 2023.
Management fees to hotel operators: Management fees to operators amounted to Ps.$8.0 million for the six-month period ended June 30, 2024, an
increase of Ps.$5.7 million or 253.0% from the six-month period ended June 30, 2023. The increase corresponds to the increase in revenue since these management fees are calculated mainly based on the income generated by the Insurgentes 421 Hotel
Complex and the Vivid Hotel.
Depreciation and amortization: Depreciation and amortization amounted to Ps.$127.1 million for the six-month period ended June 30, 2024, an increase
of Ps.$63.7 million or 100.6% from the six-month period ended June 30, 2023. The increase is mainly attributable to the amortization of the right-of-use of assets arising from significant leases entered into after June 30, 2023, including a lease
agreement with Arrendadora Coppel, S.A.P.I. de C.V. for furniture, fixtures and equipment ("FF&E") and the lease of corporate offices. Additionally, since the Vivid Hotel started operations, the fixed assets depreciation related to this hotel
amounted to Ps.$38.6 million for the six-month period ended June 30, 2024.
Property tax: Property tax amounted to Ps.$5.3 million for the six-month period ended June 30, 2024, a decrease of Ps.$4.5 million or 46.0% from the
six-month period ended June 30, 2023, since in the prior period the Group recognized and paid Ps.$2.7 million related to prior periods property taxes.
Professional Fees: Fees amounted to Ps.$109.9 million for the six-month period ended June 30, 2024, an increase of Ps.$72.7 million or 195.2% from
the six-month period ended June 30, 2023. The increase is mainly attributable to legal and transaction costs incurred to complete the Business Combination. Also, the Group has required services from financial and legal advisors to renegotiate its
existing loans and to obtain new financing.
Maintenance and conservation: Maintenance and conservation amounted to Ps.$22.8 million for the six-month period ended June 30, 2024, an increase of
Ps.$18.3 million or 403.5% from the six-month period ended June 30, 2023. The increase is mainly attributable to the operation of the Insurgentes 421 Hotel Complex, which as of June 30, 2023 had just recently opened and did not require large
maintenance expenses. Furthermore, the Vivid Hotel also incurred these expenditures during the second quarter of 2024, which amounted to Ps.$6.3 million.
Utility expenses: Utility expenses amounted to Ps.$24.0 million for the six-month period ended June 30, 2024, an increase of Ps.$17.5 million or
271.0% from the six-month period ended June 30, 2023. The increase is mainly attributable to higher occupancy in the Insurgentes 421 Hotel Complex and the Vivid Hotel, compared to the prior year.
Advertising: Advertising amounted to Ps.$27.8 million for the six-month period ended June 30, 2024, an increase of Ps.$19.5 million or 237.3% from
the six-month period ended June 30, 2023. The increase is mainly attributable to management efforts to promote the Vivid Hotel, the expense related to announcing this hotel amounted to Ps.$23.8 million.
Donations: Donations amounted to Ps.$3.4 million for the six-month period ended June 30, 2024, a decrease of Ps.$2.6
million or 43% from Ps.$6.0 million for the six-month period ended June 30, 2023. This donation is granted to the same association as previous periods, the UNICEF International Council to support the
transformation of education in Mexico, with amounts granted dependent on the available resources of the Group.
4
Insurance: Insurance amounted to Ps.$8.7 million for the six-month period ended June 30, 2024, an increase of Ps.$4.5 million or 110.2% from the
six-month period ended June 30, 2023. The increase in insurance expenses was attributable mainly to an insurance policy for the Grand Island Beach Club, part of the GIC Complex in Cancun (the "Beach Club") acquired
in March 2023. Moreover, there was also an increase in insurance premiums for the Insurgentes 421 Hotel Complex and the Vivid Hotel, driven by increases in the fair value of those properties upon the commencement of operations. Also, as part of
the hotel management agreement with Hyatt Hotels Corporation, Hyatt of Mexico, S.A. de C.V. and any subsidiary and/or affiliate thereof ("Hyatt"), the Group provides major medical expense insurance for
senior operating managers.
Software: Software amounted to Ps.$3.9 million for the six-month period ended June 30, 2024, a decrease of Ps.$0.6 million or 13.1% from the
six-month period ended June 30, 2023. This expense relates to certain equipment and operating software implementation costs incurred at the Vivid Hotel.
Cleaning and laundry: Cleaning and laundry amounted to Ps.$6.2 million for the six-month period ended June 30, 2024, an increase of Ps.$2.1 million
or 49.9% from the six-month period ended June 30, 2023. The increase is mainly attributable to higher occupancy in the Insurgentes 421 Hotel Complex and the Vivid Hotel compared to the prior year.
Supplies and equipment: Supplies and equipment amounted to Ps.$11.3 million for the six-month period ended June 30, 2024, an increase of Ps.$10.9
million or 2,318.4% from the six-month period ended June 30, 2023. This increase is mainly attributable to the acquisition of minor equipment for the Vivid Hotel’s operations, which amounted to Ps.$8.8 million.
Bank commissions: Bank fees amounted to Ps.$13.9 million for the six-month period ended June 30, 2024, an increase of Ps.$11.5 million or 475.6%
from the six-month period ended June 30, 2023. The increase is mainly attributable to a higher volume of transactions derived from management efforts to increase occupancy in the Insurgentes 421 Hotel Complex.
Other costs: Other costs amounted to Ps.$40.2 million for the six-month period ended June 30, 2024, an increase of Ps.$0.7 million or 1.7% from the
six-month period ended June 30, 2023. The increase is mainly attributable to sundry expenses related to the increase in the Insurgentes 421 Hotel Complex’s revenue, and the opening of the Vivid Hotel on April 1, 2024.
Interest income: Interest income amounted to Ps.$7.7 million for the six-month period ended June 30, 2024, an increase of Ps.$5.6 million or 277.2%
from the six-month period ended June 30, 2023. The increase is mainly attributable to the interest accrued from loans granted to related parties, with the majority of these loans restructured to increase the credit line granted during 2024.
Interest expense: Interest expense amounted to Ps.$238.0 million for the six-month period ended June 30, 2024, an increase of Ps.$100.2 million or
72.7% from the six-month period ended June 30, 2023. The increase is mainly attributable to the borrowings on available credit lines. During the first and second quarter of 2024, the Group reached maximum drawings on available credit lines.
Exchange rate income, net: Exchange rate income, net amounted to Ps.$527.0 million loss for the six-month period ended June 30, 2024, a decrease of
Ps.$1,205.1 million or 177.7% from the six-month period ended June 30, 2023. The decrease is mainly attributable to the fluctuation between the peso and the U.S. dollar, which from December 2022 to June 2023 the Mexican currency appreciated 13.7%
approximately, and from December 2023 to June 2024 the U.S. dollar appreciated 8.1% above the Mexican peso.
Changes in fair value of financial derivative instruments: Valuation of financial derivative instruments amounted to an income of Ps.$3.3 million for
the six-month period ended June 30, 2024, an increase of Ps.$27.2 million or 113.6% from a loss of Ps.$23.9 million for the six-month period ended June 30, 2023. The decrease is mainly attributable to changes in the hedge notional amount arising
from payments during 2024.
5
Other income: Other income amounted to Ps.$14.6 million for the six-month period ended June 30, 2024, an increase of Ps.$5.3 million or 56.3% from
the six-month period ended June 30, 2023.
Other expenses: Other expenses amounted to Ps.$5.0 million for the six-month period ended June 30, 2024, an increase
of Ps.$4.8 million or 3081.4% from Ps.$0.2 million for the six-month period ended June 30, 2023.
Income taxes: Income taxes amounted to Ps.$1.1 million for the six-month period ended June 30, 2024, a decrease of Ps.$22.2 million or 95.1% from
the six-month period ended June 30, 2023. For the six month period ended June 30, 2024 the Group recognized Ps.$4.1 million of deferred income tax benefit compared to Ps.$20.8 million of deferred income tax expense for the six-month period ended
June 30, 2023, since the Vivid Hotel opened on April 1, 2024, the Group recognized less capitalized borrowing costs in its property, plant and equipment which is reflected in a decrease in the deferred income tax liability.
Net (loss) profit for the period: For the reasons outlined above, the Group recorded a net loss of Ps.$1,089.3 million for the six-month period ended June 30, 2024, compared to a net profit of Ps.$307.5
million for the six-month period ended June 30, 2023.
Debt
As of June 30, 2024, we were in compliance with the covenants and restrictions in our financing agreements that require, among others, to provide the lenders quarterly and annually with the Group’s internal financial statements and compliance
with certain ratios and reserve funds, except for the covenant breaches mentioned in section “Recent Developments” included herein and/or as discussed in the notes to the Murano Group 2024 Interim Financial Statements.
In addition, during the six-month period ended as of June 30, 2024, the following developments occurred in connection with certain of our financing agreements:
GIC I Loan
| - |
On April 9, 2024, Avantta Sentir Común, S. A. de C.V., SOFOM, E.N.R., as joining lender and assignee, Sabcapital, S.A. de C.V., SOFOM, E.R., as assignor, and Banco Sabadell, S.A., Institución de Banca Múltiple ("Sabadell"), in its
capacity as administrative and collateral agent, entered into an amendment to the GIC I Loan. Pursuant to such amendment, Sabcapital, S.A. de C.V., SOFOM, E.R. assigned and transferred to Avantta Sentir Común, S. A. de C.V., SOFOM,
E.N.R., its rights and obligations owned as a Tranche C lender, representing 60% of the Tranche C commitment, amounting to U.S. $6.0 million as the assigned amount
|
GIC I VAT Loan
| - |
On April 11, 2024, and May 24, 2024, respectively, further drawdowns totalling Ps.$200.7 million (US$12.0 million) were made on the that certain VAT loan facility dated October 16, 2019 (as amended, supplemented and/or restated from
time to time) (the "GIC I VAT Loan"), with payments also made against the loan from VAT receipts. On June 30, 2024, the outstanding balance of the GIC I VAT Loan was Ps.$202.8 million (U.S.$11.0 million) and as of the date of this report,
the outstanding balance of the GIC I VAT loan is Ps.$192.6 million (U.S.$10.3 million).
|
Exitus Loans
| - |
On April 26, 2024, and May 27, 2024, Murano World received U.S.$325,000 and U.S.$374,000, respectively, in disbursements under the U.S.$2.5 million loan facility of the credit agreements, (a) dated May 31, 2022, by and between Murano
World, as borrower, and Exitus, as lender, secured through the 250C Trust, in an aggregate amount of U.S.$15,000,000 at a fixed interest rate of 15%, and maturing on May 31, 2025, (b) dated June 26, 2023, by and between Murano World, as
borrower, and Exitus, as lender, in an aggregate amount of U.S.$972,396 at a fixed interest rate of 15%, and maturing on December 26, 2025, and (c) December 5, 2023, by and between Murano World, as borrower, and Exitus, as lender, in an
aggregate amount of U.S.$2,500,000 at a fixed interest rate of 15%, and maturing on December 5, 2025 (the "Exitus Loans").
|
6
New Finamo Loan
On April 9, 2024, Murano PV, S. A. de C.V., as borrower, entered into a new loan agreement with Administradora de Soluciones, S.A. de C.V., SOFOM, E.N.R. ("Finamo"), as lender, for Ps$100,000,000 (the “New Finamo Loan”). The New Finamo Loan
bears a fixed annual interest rate of 22% maturing on October 15, 2024. The loan is secured by Lot 3, which is owned by the Murano 4000 Trust. Murano acted opportunistically by borrowing the New Finamo Loan in Mexican Pesos at a relatively
expensive rate expecting that the Peso would weaken from an artificially strong rate of approximately 16 to 1 USD. This occurred as the Mexican Peso is currently at approximately 20 to 1 USD, thereby lowering the overall cost of the borrowing.
As of December 31, 2023, the Group complied with all terms and covenants included in the loan agreements, except for the following:
GIC I Trust
| - |
The Group anticipated that, it might not have the debt service reserve account of the GIC I Loan fully funded as of December 31, 2023, and requested a waiver from the lenders, such waiver was received on December 29, 2023.
Consequently, the breach was waived as of December 31, 2023.
|
Inmobiliaria Insurgentes 421
| - |
As of December 31, 2023, the additional debt service reserve fund of the Insurgentes 421 Loan was not fully funded, the Group requested a waiver from the lender in connection with the funding obligations of the debt service reserve
funds. As described in note 10 to the Murano Group Combined 2023 Audited Financial Statements, the Group obtained an event of default waiver provided by Bancomext, consequently the lender will not call the debt. The Group classified the
outstanding balance of this loan as a current liability as of December 31, 2023 due to the waiver being obtained after year-end.
|
The Group classified the outstanding balance of the GIC I Loan and the Insurgentes 421 Loan as current liabilities as of June 30, 2024.
For the six-month period ended June 30, 2024, interest expense on borrowings amounted to Ps.$238.0 million.
7
The following chart sets forth a summary of existing indebtedness with third parties as of June 30, 2024:
|
|
Currency
|
Type & Security
|
Interest Rate
|
Current Interest rate
|
Maturity
|
MXPs
|
US
|
||||||||||||||||||
|
A. Loan Obligations
|
|||||||||||||||||||||||||
|
Grand Island I
|
|||||||||||||||||||||||||
|
Bancomext
|
USD
|
Syndicated mortgage loan up to US$240m
|
SOFR+ 4.0116%
|
9.33
|
%
|
2033
|
1,102,638,000
|
60,000,000
|
|||||||||||||||||
|
Caixabank, S.A.
|
USD
|
SOFR + 4.0116%
|
9.33
|
%
|
2033
|
1,102,638,000
|
60,000,000
|
||||||||||||||||||
|
Sabadell
|
USD
|
SOFR + 4.0116%
|
9.33
|
%
|
2033
|
992,374,200
|
54,000,000
|
||||||||||||||||||
|
Avantta
|
USD
|
SOFR + 4.0116%
|
9.33
|
%
|
2033
|
110,263,800
|
6,000,000
|
||||||||||||||||||
|
NAFIN
|
USD
|
Secured loan up to US$30.5m to finance
|
SOFR+ 4.0116%
|
9.33
|
%
|
2033
|
1,099,167,438
|
59,811,150
|
|||||||||||||||||
|
Bancomext
|
MXN
|
VAT receivables
|
TIIE91 +2.75%
|
14.00
|
%
|
2024
|
202,751,620
|
11,032,721
|
|||||||||||||||||
|
Total Loans Grand Island
|
4,609,833,058
|
250,843,870
|
|||||||||||||||||||||||
|
Insurgentes 421
|
|||||||||||||||||||||||||
|
Bancomext
|
USD
|
Secured loan up to US$100m
|
SOFR + 3.5%
|
8.83
|
%
|
2037
|
1,819,153,199
|
98,989,144
|
|||||||||||||||||
|
Total Loans Insurgentes 421
|
1,819,153,199
|
98,989,144
|
|||||||||||||||||||||||
|
Murano World (Corporate)
|
|||||||||||||||||||||||||
|
Exitus Capital
|
USD
|
Loan up to US$15m
|
15.00
|
%
|
15.00
|
%
|
2025
|
275,659,500
|
15,000,000
|
||||||||||||||||
|
Exitus Capital
|
USD
|
Loan agreement up to US$972,396
|
15.00
|
%
|
15.00
|
%
|
2025
|
13,145,228
|
715,297
|
||||||||||||||||
|
Exitus Capital
|
USD
|
Loan agreement up to US$2.5m
|
15.00
|
%
|
15.00
|
%
|
2025
|
44,730,556
|
2,434,011
|
||||||||||||||||
|
ALG
|
USD
|
Secured loan on Beach Club up to US$20m
|
10.00
|
%
|
10.00
|
%
|
2030
|
367,546,000
|
20,000,000
|
||||||||||||||||
|
Santander Internacional
|
USD
|
Loan $2m
|
BASE RATE + 0.80%
|
BASE RATE + 0.80%
|
2025
|
36,740,747
|
1,999,246
|
||||||||||||||||||
|
Total Loans Murano World (Corporate)
|
737,822,031
|
40,148,554
|
|||||||||||||||||||||||
|
Murano PV (Corporate)
|
|||||||||||||||||||||||||
|
Finamo
|
USD
|
Secured loan up to US$26m
|
15.00
|
%
|
2030
|
477,809,800
|
26,000,000
|
||||||||||||||||||
|
Finamo
|
MXN
|
Secured loan up to MXN$100m
|
22.00
|
%
|
2024
|
100,000,000
|
5,441,496
|
||||||||||||||||||
|
Total Loans Murano PV (Corporate)
|
577,809,800
|
31,441,496
|
|||||||||||||||||||||||
|
Subtotal
|
7,744,618,088
|
421,423,065
|
|||||||||||||||||||||||
|
Cost to obtain loans and commissions
|
(86,271,971
|
)
|
(4,694,486
|
)
|
|||||||||||||||||||||
|
Accrued interest payable
|
149,526,759
|
8,147,101
|
|||||||||||||||||||||||
|
Total Loans
|
7,807,872,876
|
424,875,680
|
|||||||||||||||||||||||
|
B. Sale & Lease Back Liabilities
|
|||||||||||||||||||||||||
|
Finamo
|
MXN
|
Sale & Lease back agreements on GIC I
|
2027
|
332,720,752
|
18,104,986
|
||||||||||||||||||||
|
Exitus Capital
|
MXN
|
Sale & Lease back agreements on GIC I
|
2024
|
8,215,610
|
447,052
|
||||||||||||||||||||
|
Total Sale & Lease Back Liabilities
|
340,936,362
|
18,552,038
|
|||||||||||||||||||||||
|
Total Debt
|
8,148,809,238
|
443,427,717
|
|||||||||||||||||||||||
|
C. Loans with related parties
|
|||||||||||||||||||||||||
|
Sofoplus
|
MXN
|
Loan up to US$15m
|
2025
|
183,773,000
|
10,000,000
|
||||||||||||||||||||
|
Sofoplus
|
MXN
|
Factoring
|
2024
|
10,999,325
|
598,528
|
||||||||||||||||||||
|
ITV
|
MXN
|
Loan up to MXN$97,500M
|
2025
|
34,143,716
|
1,857,929
|
||||||||||||||||||||
|
ITV
|
MXN
|
Loan
|
17,200,000
|
935,937
|
|||||||||||||||||||||
|
ES Agrupación
|
MXN
|
Loan
|
317,000,000
|
17,249,542
|
|||||||||||||||||||||
|
BVG Infraestructura
|
MXN
|
Loan up to US$955,011
|
2025
|
8,663,846
|
471,443
|
||||||||||||||||||||
|
Accrued interest payable
|
MXN
|
Loan
|
2025
|
5,440,529
|
296,046
|
||||||||||||||||||||
|
Total Loans with related parties
|
577,220,415
|
31,409,424
|
|||||||||||||||||||||||
|
Total Debt
|
8,726,029,653
|
474,837,142
|
|||||||||||||||||||||||
For further information on our financing arrangements, see Notes 4 and 7 to the Murano Group June 30, 2024 Interim Financial Statements included herein and Notes 6 and 10 to the Murano Group Combined 2023 Audited Financial Statements included
in the Murano PubCo 2023 Annual Report on Form 20-F.
8
Commitments and Contingencies
We are subject to litigation, claims, and other commitments and contingencies arising in the ordinary course of business. While no assurance can be given as to the ultimate outcome of any litigation matters, we do not believe it is probable
that a loss will be incurred and do not expect the ultimate resolution of any open matters will have a material adverse effect on our financial position or results of operations.
Off-Balance Sheet Arrangements
As of June 30, 2024 and December 31, 2023, we did not have any off-balance sheet arrangements.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to a variety of market and other risks, including credit risk, liquidity risk, market risk, operating risk, and legal risk. For quantitative and qualitative disclosures about these risks, see Note 13 to the Murano Group Combined
2023 Audited Financial Statements included in the Murano PubCo 2023 Annual Report on Form 20-F.
9
EXHIBIT 2
Condensed, Consolidated and Combined Interim Financial Statements of Murano PV, S.A. de C.V. and Subsidiaries as of June 30, 2024, and for the six-month periods ended June 30, 2024 and 2023
Murano PV, S.A. de C.V. and Subsidiaries
Condensed Consolidated and Combined Interim Financial Statements for 2024 and 2023
|
Table of contents
|
Page
|
|
Condensed Consolidated and Combined Interim Statements of Financial Position
|
2
|
|
Condensed Consolidated and Combined Interim Statements of Profit or Loss and Other Comprehensive Income
|
3
|
|
Condensed Consolidated and Combined Interim Statements of Change in Stockholders’ Equity
|
4
|
|
Condensed Consolidated and Combined Interim Statements of Cash Flows
|
5
|
|
Notes to Condensed Consolidated and Combined Interim Financial Statements
|
6 - 22
|
Murano PV, S. A. de C. V. and Subsidiaries
Condensed Consolidated and Combined Interim Statements of Financial Position
As of June 30, 2024 and December 31, 2023
(Mexican pesos)
|
Notes
|
June 30,
|
December 31,
|
|||||||||
|
2024
|
2023
|
||||||||||
|
Assets
|
|||||||||||
|
Current Assets:
|
|||||||||||
|
Cash and cash equivalents and restricted cash
|
3
|
$
|
125,920,722
|
$
|
146,369,734
|
||||||
|
Trade receivables
|
44,632,649
|
16,831,611
|
|||||||||
|
VAT receivable
|
289,177,670
|
242,079,862
|
|||||||||
|
Other receivables
|
34,379,812
|
28,341,695
|
|||||||||
|
Due from related parties
|
4
|
86,553,792
|
143,549,146
|
||||||||
|
Prepayments
|
11,556,188
|
18,792,796
|
|||||||||
|
Inventories
|
9,558,265
|
1,415,594
|
|||||||||
|
Total current assets
|
601,779,098
|
597,380,438
|
|||||||||
|
Property, construction in process and equipment, net
|
5
|
18,250,889,782
|
17,420,027,969
|
||||||||
|
Investment property
|
6 |
1,100,491,490
|
1,100,491,490
|
||||||||
|
Right of use assets, net
|
194,361,673
|
217,037,091
|
|||||||||
|
Financial derivative instruments
|
120,173,774
|
116,923,727
|
|||||||||
|
Guarantee deposits
|
4,172,685
|
21,480,806
|
|||||||||
|
Total non-current assets
|
19,670,089,404
|
18,875,961,083
|
|||||||||
|
Total assets
|
$
|
20,271,868,502
|
$
|
19,473,341,521
|
|||||||
|
Liabilities, Stockholders’ Equity and Net Assets
|
|||||||||||
|
Current Liabilities:
|
|||||||||||
|
Current instalments of long-term debt
|
7
|
$
|
7,012,278,934
|
$
|
2,039,355,678
|
||||||
|
Trade accounts payable and accumulated expenses
|
495,614,657
|
399,163,421
|
|||||||||
|
Advance customers
|
13,272,899
|
8,263,469
|
|||||||||
|
Due to related parties
|
4
|
546,699,806
|
133,002,659
|
||||||||
|
Lease liabilities
|
38,897,113
|
30,006,807
|
|||||||||
|
Income tax payable
|
10,141,924
|
12,135,180
|
|||||||||
|
Employees’ statutory profit sharing
|
3,356,206
|
2,241,724
|
|||||||||
|
Contributions for future net assets
|
3,500,000
|
3,500,000
|
|||||||||
|
Total current liabilities
|
8,123,761,539
|
2,627,668,938
|
|||||||||
|
Non-current Liabilities:
|
|||||||||||
|
Long-term debt, excluding current instalments
|
7
|
1,136,530,304
|
4,643,317,136
|
||||||||
|
Due to related parties, excluding current portion
|
4
|
30,004,911
|
87,302,929
|
||||||||
|
Lease liabilities, excluding current portion
|
155,888,404
|
177,954,726
|
|||||||||
|
Employee benefits
|
10,284,968
|
8,766,021
|
|||||||||
|
Other liabilities
|
66,460,996
|
62,504,424
|
|||||||||
|
Deferred tax liabilities
|
4,027,546,788
|
4,031,599,864
|
|||||||||
|
Total non-current liabilities
|
5,426,716,371
|
9,011,445,100
|
|||||||||
|
Total liabilities
|
13,550,477,910
|
11,639,114,038
|
|||||||||
|
Stockholders’ Equity and Net Assets
|
|||||||||||
|
Net parent investment
|
-
|
902,611,512
|
|||||||||
|
Common stock
|
11
|
900,052,000
|
-
|
||||||||
|
|Accumulated deficit
|
(2,291,322,214
|
)
|
(1,181,044,835
|
)
|
|||||||
|
Other comprehensive income
|
8,112,660,806
|
8,112,660,806
|
|||||||||
|
Total Stockholders’ Equity and Net Assets
|
6,721,390,592
|
7,834,227,483
|
|||||||||
|
Total Liabilities, Stockholders’ Equity and Net Assets
|
$
|
20,271,868,502
|
$
|
19,473,341,521
|
|||||||
The accompanying notes are an integral part of these condensed consolidated and combined interim financial statements.
2
Murano PV, S.A. de C.V. and Subsidiaries
Condensed Consolidated and Combined Interim Statements of Profit or Loss and Other Comprehensive Income
For the six-month periods ended June 30, 2024 and 2023
(Mexican pesos)
|
For the six months ended June 30,
|
|||||||||||
|
Notes
|
2024
|
2023
|
|||||||||
|
Revenue
|
8
|
$
|
267,493,096
|
$
|
107,345,787
|
||||||
|
Direct and selling, general and administrative expenses:
|
|||||||||||
|
Employee benefits
|
143,228,829
|
76,418,979
|
|||||||||
|
Food & beverage and service cost
|
43,845,033
|
30,780,790
|
|||||||||
|
Sales commissions
|
11,668,788
|
3,922,916
|
|||||||||
|
Management fees to hotel operators
|
8,010,977
|
2,269,267
|
|||||||||
|
Depreciation and amortization
|
127,058,666
|
63,350,256
|
|||||||||
|
Property tax
|
5,282,979
|
9,780,872
|
|||||||||
|
Professional fees
|
109,920,067
|
37,236,737
|
|||||||||
|
Maintenance and conservation
|
22,791,467
|
4,526,294
|
|||||||||
|
Utility expenses
|
23,972,119
|
6,461,275
|
|||||||||
|
Advertising
|
27,780,601
|
8,236,255
|
|||||||||
|
Donations
|
3,390,680
|
5,951,130
|
|||||||||
|
Insurance
|
8,664,284
|
4,121,519
|
|||||||||
|
Software
|
3,918,014
|
4,506,780
|
|||||||||
|
Cleaning and laundry
|
6,185,705
|
4,127,309
|
|||||||||
|
Supplies and equipment
|
11,325,580
|
468,300
|
|||||||||
|
Bank fees
|
13,890,855
|
2,413,473
|
|||||||||
|
Other costs
|
40,219,551
|
39,529,769
|
|||||||||
|
Total direct and selling, general and administrative expenses
|
611,154,195
|
304,101,921
|
|||||||||
|
Interest income
|
7,655,701
|
2,029,494
|
|||||||||
|
Interest expense
|
(238,020,003
|
)
|
(137,796,876
|
)
|
|||||||
|
Exchange rate (expense) income, net
|
(527,046,262
|
)
|
678,078,298
|
||||||||
|
Changes in fair value of financial derivative instruments
|
3,250,047
|
(23,903,466
|
)
|
||||||||
|
Other income
|
9
|
14,617,392
|
9,350,566
|
||||||||
|
Other expenses
|
(4,993,947
|
)
|
(156,974
|
)
|
|||||||
|
(Loss) profit before income taxes
|
(1,088,198,171
|
)
|
330,844,908
|
||||||||
|
Income taxes
|
10
|
1,135,109
|
23,368,578
|
||||||||
|
Net (loss) profit for the period
|
$
|
(1,089,333,280
|
)
|
$
|
307,476,330
|
||||||
|
Total comprehensive (loss) income
|
$
|
(1,089,333,280
|
)
|
$
|
307,476,330
|
||||||
The accompanying notes are an integral part of these condensed consolidated and combined interim financial statements.
3
Murano PV, S. A. de C. V. and Subsidiaries
Condensed Consolidated and Combined Interim Statements of Changes in Stockholders’ Equity and Net Assets
For the Six-month periods ended June 30, 2024 and 2023
(Mexican pesos)
|
Other Comprehensive Income
|
|||||||||||||||||||||||||||
|
Note
|
Net parent
investment
|
Common Stock
|
Accumulated
Deficit
|
Revaluation of
property,
construction in
process and
equipment net of
deferred income
tax
|
Remeasurement
of net defined
benefit liability
net of deferred
income tax
|
Total
|
|||||||||||||||||||||
|
Balance as of January 1, 2023
|
$
|
902,611,512
|
$
|
-
|
$
|
(1,238,837,756
|
)
|
$
|
8,737,110,903
|
$
|
(1,549,674
|
)
|
8,399,334,985
|
||||||||||||||
|
Profit for the period
|
-
|
-
|
307,476,330
|
-
|
-
|
307,476,330
|
|||||||||||||||||||||
|
Balance as of June 30, 2023
|
902,611,512
|
-
|
(931,361,426
|
)
|
8,737,110,903
|
(1,549,674
|
)
|
8,706,811,315
|
|||||||||||||||||||
|
Balance as of January 1, 2024
|
902,611,512
|
-
|
(1,181,044,835
|
)
|
8,114,123,261
|
(1,462,455
|
)
|
7,834,227,483
|
|||||||||||||||||||
|
Reimbursements of net parent investment
|
(16,363,928
|
)
|
-
|
-
|
-
|
-
|
(16,363,928
|
)
|
|||||||||||||||||||
|
Capital restructuring
|
2.b.2
|
(886,247,584
|
)
|
900,052,000
|
(20,944,099
|
)
|
-
|
-
|
(7,139,683
|
)
|
|||||||||||||||||
|
Loss for the period
|
-
|
-
|
(1,089,333,280
|
)
|
-
|
-
|
(1,089,333,280
|
)
|
|||||||||||||||||||
|
Balance as of June 30, 2024
|
$
|
-
|
$
|
900,052,000
|
$
|
(2,291,322,214
|
)
|
$
|
8,114,123,261
|
$
|
(1,462,455
|
)
|
$
|
6,721,390,592
|
|||||||||||||
The accompanying notes are an integral part of these condensed consolidated and combined interim financial statements.
4
Murano PV, S.A. de C.V. and Subsidiaries
Condensed Consolidated and Combined Interim Statements of Cash Flows
For the six-month periods ended June 30, 2024 and 2023
(Mexican pesos)
|
For the six months ended June 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
(Loss) profit before income taxes
|
$
|
(1,088,198,171
|
)
|
$
|
330,844,908
|
|||
|
Adjustments for:
|
||||||||
|
Depreciation of property, construction in process and equipment
|
104,383,248
|
63,350,256
|
||||||
|
Depreciation of right of use assets
|
22,675,418
|
-
|
||||||
|
Amortization of costs to obtain loans and commissions
|
8,215,912
|
3,374,815
|
||||||
|
Valuation of financial derivative instruments
|
(3,250,047
|
)
|
23,903,466
|
|||||
|
Interest expense
|
232,580,713
|
137,796,876
|
||||||
|
Interest expense lease liability
|
5,439,290
|
-
|
||||||
|
Interest income
|
(7,655,701
|
)
|
(2,029,494
|
)
|
||||
|
Effect on changes in foreign exchange rates
|
617,632,818
|
(683,241,203
|
)
|
|||||
|
(108,176,520
|
)
|
(126,000,376
|
) |
|||||
|
Changes in:
|
||||||||
|
(Increase) decrease in VAT receivable
|
(47,097,808
|
)
|
46,045,312
|
|||||
|
Increase in trade receivables
|
(27,801,038
|
)
|
(6,928,278
|
)
|
||||
|
Increase in other receivables
|
(6,038,117
|
)
|
(4,981,009
|
)
|
||||
|
Decrease in prepayments
|
7,236,608
|
31,229,510
|
||||||
|
(Increase) decrease in inventory
|
(8,142,671
|
)
|
1,274,085
|
|||||
|
Decrease (increase) in other assets
|
17,308,121
|
(12,839,794
|
)
|
|||||
|
Increase in trade payables and taxes
|
97,105,288
|
30,769,645
|
||||||
|
Increase in employee benefits
|
1,518,947
|
1,211,373
|
||||||
|
Increase in other liabilities
|
3,956,572
|
34,016,156
|
||||||
|
Increase (decrease) in employees’ statutory profit sharing
|
1,114,482
|
(809,797
|
)
|
|||||
|
Income tax paid
|
(2,826,063
|
)
|
-
|
|||||
|
Net cash flows generated from (used in) operating activities
|
(71,842,199
|
)
|
(7,013,173
|
)
|
||||
|
Cash flows used in investing activities:
|
||||||||
|
Acquisition of property, construction in process and equipment
|
(935,245,061
|
)
|
(792,911,972
|
)
|
||||
|
Loans collected from (granted to) related parties
|
63,239,067
|
(64,832,739
|
)
|
|||||
|
Interest received
|
1,411,988
|
601,041
|
||||||
|
Net cash flows used in investing activities
|
(870,594,006
|
)
|
(857,143,670
|
)
|
||||
|
Cash flows from financing activities:
|
||||||||
|
Reimbursements of net parent investment
|
(16,363,928
|
)
|
-
|
|||||
|
Contributions for future common stock increase
|
-
|
(55,939,020
|
)
|
|||||
|
Payments related to the capital restructure
|
(7,139,683
|
)
|
-
|
|||||
|
Loan proceeds
|
1,349,256,658
|
1,256,939,492
|
||||||
|
Loan payments to third parties
|
(506,903,939
|
)
|
(112,099,238
|
)
|
||||
|
Borrowing cost paid
|
(18,250,564
|
)
|
(19,146,213
|
)
|
||||
|
Loans received from related parties
|
344,719,199
|
17,962,207
|
||||||
|
Loan payments to related parties
|
(6,671,532
|
)
|
(30,698,630
|
)
|
||||
|
Payments of leasing liabilities
|
(19,836,509
|
)
|
(269,043
|
)
|
||||
|
Interest paid
|
(196,822,509
|
)
|
(108,344,781
|
)
|
||||
|
Net cash flows from financing activities
|
921,987,193
|
948,404,774
|
||||||
|
Net (decrease) increase in cash and cash equivalents and restricted cash
|
(20,449,012
|
)
|
84,247,931
|
|||||
|
Cash and cash equivalents and restricted cash at the beginning of the period
|
146,369,734
|
240,754,805
|
||||||
|
Cash and cash equivalents and restricted cash at the end of the period
|
$
|
125,920,722
|
$
|
325,002,736
|
||||
The accompanying notes are an integral part of these condensed consolidated and combined interim financial statements.
5
Murano PV, S. A. de C. V. and Subsidiaries
Notes to the Condensed Consolidated and Combined Interim Financial Statements
As of June 30, 2024 and December 31, 2023, and
for the six-month periods ended June 30, 2024, and 2023
(Amounts in Mexican pesos)
| 1. |
Reporting Entity and description of business
|
| a. |
Corporate information
|
On September 3, 2024, Elias Sacal Cababie, Chief Executive Officer, Marcos Sacal Cohen, Chief Operating Officer, David James Galan, Global Chief
Financial Officer and Oscar Jazmani Mendoza Escobar, Chief Financial Officer Mexico, authorized the issuance of these condensed consolidated and combined interim financial statements.
Murano PV, S. A. de C. V. and its subsidiaries (together referred to as the “Group”) is headquartered at F. C. de Cuernavaca 20, 12th
floor, Lomas – Virreyes, Lomas de Chapultepec III Secc., Miguel Hidalgo, 11000, Mexico City. The Group is a Mexican development group with extensive experience in the structuring, development and assessment of industrial, residential, corporate
office, and hotel projects in Mexico. The Group also provides comprehensive services, including the execution, construction, management, and operation of a wide variety of industrial, business, tourism, and medical real estate projects, among
others. The Group is primarily involved in developing and managing luxury hotels in urban and beach resort destinations.
In the first quarter of 2023, the Andaz and Mondrian Hotels, in Mexico City, were already fully operational with a combined
capacity of 396 rooms.
The Group is also developing a resort complex in Grand Island, Cancun, Quintana Roo (the “GIC Complex”), which is ultimately expected to
incorporate over 3,000 rooms, a convention center (under the world trade center brand), a water park, a retail village and a beach club. This project is divided into two phases:
| I. |
Phase one is nearing completion and when fully operational will have 1,016 rooms, under two hotel brands: (i) 400 rooms, operated under the “Vivid” brand, an adult-only brand; and (ii) 616 rooms, to be operated under the “Dreams”
brand, a family-friendly brand. On April 1, 2024, the Vivid hotel began operations. The Dreams hotel is expected to commence operations in the fourth quarter of 2024.
|
| II. |
Phase two of the GIC Complex in Cancun is planned as an integrated resort split across four different hotel brands all operated by Hyatt (Hyatt Inclusive Collection). This second phase is planned to have
2,000 rooms, but the Group has not yet begun the process securing financing for the development phase and a completion date is not possible to estimate at this time.
|
The Group is also planning to develop a 5 star upper-upscale resort, in Bajamar, Baja California. The development is currently under preliminary
evaluation and the Group has not yet begun the process of securing financing for this project and a completion date is therefore not possible to estimate at this time.
Also in Baja California, the Group is engaged in the development of industrial parks, such as the Baja Park Development Project which is expected
to include approximately 363,262 sqm of retail area. Construction is expected to begin once financing has been secured, a completion date is therefore not possible to estimate at this time.
6
| b. |
Significant transactions
|
| i. |
The first phase of GIC I commenced operations with the opening of the Vivid Hotel on April 1, 2024.
|
| ii. |
On March 20, 2024, Murano Global Investments PLC, parent entity of Murano PV, and HCM Acquisition Corp (“HCM”) completed the Amended and Restated Business Combination Agreement (“A&R BCA”). These condensed
consolidated and combined interim financial statements do not reflect any impact derived from this transaction since the accounting and economic impacts are reflected at the Murano Global Investments PLC
entity level.
|
| iii. |
In March 2023, the Group acquired a beach club in Cancun for an amount of $171 million (approximately U.S.$9.4 million). The Group signed a secured loan agreement with ALG Servicios Financieros México, S.A. de
C.V., SOFOM E.N.R. (“ALG”) for a principal amount of U.S.$20 million. The first disbursement of U.S.$8 million, was used to finance the acquisition of the beach club land. In April and July 2023, the Group drew U.S.$5 million and U.S.$7
million, respectively, which were used for the construction of the beach club. The loan bears an annual interest rate of 10% and matures on December 1, 2030. The Group provided this beach club as a guarantee for this loan. ALG is
incorporated as trustee in the guarantee trust of Fideicomiso Murano 2000 (see Note 2).
|
| 2. |
Basis of preparation
|
These condensed consolidated and combined interim financial statements have been prepared on a consolidated basis as of and for the six-month
period ended June 30, 2024 and on a combined basis prior to the capital restructuring which occurred on March 8, 2024, as discussed in 2.b.2. Since the entities included in these financial statements were under common control both prior to and
after the capital restructuring, it had no impact on the financial position, results or operations, or cash flows presented.
| a. |
Statement of compliance
|
These condensed consolidated and combined interim financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting and should be read in conjunction with the Group´s last annual consolidated financial statements as of and for the year ended December 31, 2023.
These condensed consolidated and combined interim financial statements do not include all the information and disclosures required for a complete
set of financial statements prepared in accordance with IFRS Accounting Standards and should be read in conjunction with the combined financial statements as of December 31, 2023 and 2022 and for the three-year period ended December 31, 2023 (the
“last annual combined financial statements”). However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the
last annual financial statements.
| b. |
Basis of consolidation
|
b.1. Subsidiaries
The subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to or has rights to variable returns from
its involvement with the entity and has the ability to affect those returns. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control
ceases.
Intra-group balances and transactions are eliminated in the consolidation process.
7
The Group’s subsidiaries as of June 30, 2024 are set out below:
|
Entity
|
Ownership interest
|
|
Murano Management, S. A. de C. V. (“Murano Management”)
|
100.00%
|
|
Murano World, S. A. de C. V. (“Murano World”)
|
100.00%
|
|
Inmobiliaria Insurgentes 421, S. A. de C.V. (“Inmobiliaria Insurgentes 421”)
|
100.00%
|
|
Operadora Hotelera GI, S. A. de C. V. (“Operadora GIC I”)
|
100.00%
|
|
Operadora Hotelera Grand Island II, S. A. de C. V. (“Operadora GIC II”)
|
100.00%
|
|
Operadora Hotelera I421, S. A. de C. V. (“OHI421”)
|
100.00%
|
|
Operadora Hotelera I421 Premium, S. A. de C. V. (“OHI421 Premium”)
|
100.00%
|
|
Fideicomiso Murano 6000 CIB/3109 (“Insurgentes Security Trust”)
|
100.00%
|
|
Fideicomiso Murano 2000 CIB /3001 (“GIC I Trust” or “Fideicomiso Murano 2000”)
|
100.00%
|
|
Fideicomiso Murano 4000 CIB/3288 (“GIC II Trust”)
|
100.00%
|
|
Fideicomiso Murano 1000 CIB /3000
|
100.00%
|
|
Edificaciones BVG, S. A. de C. V. (“Edificaciones BVG”)
|
100.00%
|
|
Servicios Corporativos BVG, S. A. de C.V. (“Servicios BVG”)
|
100.00%
|
On April 16, 2024 Murano PV, S. A. de C. V. signed the trust agreement for the incorporation of the trust Fideicomiso Irrevocable de Administración
con Derecho de Reversión Identificado con el número CIB/4323.
On June 28, 2019 Murano World signed the trust agreement for the incorporation of the trust Fideicomiso Irrevocable de Garantía
CIB/3224.
Both of the trusts described above were incorporated by the Group in order to pursue financing opportunities.
b.2. Capital restructuring
During the first quarter of 2024, the Group underwent a restructuring to establish Murano PV, S. A. de C. V. as the intermediate holding entity of
the Mexican structure: Murano PV, S. A. de C. V., Murano World, S. A. de C. V., Edificaciones BVG, S. A. de C. V., Fideicomiso Murano 6000 CIB/3109, Inmobiliaria Insurgentes 421, S. A. de C.V., Operadora Hotelera GI, S. A. de C. V., Operadora
Hotelera Grand Island II, S. A. de C. V., Operadora Hotelera I421, S. A. de C. V., Operadora Hotelera I421 Premium, S. A. de C. V., Fideicomiso Murano 2000 CIB /3001, Fideicomiso Murano 4000 CIB/3288, Fideicomiso Murano 1000 CIB /3000, Servicios
Corporativos BVG, S. A. de C.V., and Murano Management, S. A. de C. V.
The capital restructuring involved a series of transactions between the entities and their shareholders, whereby some of the existing shareholders
sold their shares and transferred their beneficiary rights to other entities within the Group in exchange for cash and promissory notes.
Since the entities within the Group were under common control prior and after the capital restructuring, the capital restructuring does not qualify
as a business combination under IFRS 3 Business Combinations. Management deems it appropriate to account for the capital restructuring on a prospective basis for presentation purposes of the financial
statements and its related notes as of June 30, 2024 and for the six-month period then ended, mainly because prior to and after the capital restructuring, the entities within the Group are controlled by the same group of shareholders.
The capital restructuring was measured at the previous carrying amounts of assets and liabilities given that the entities are under common control.
| c. |
Going concern basis
|
These condensed consolidated financial statements have been prepared assuming the Group will continue as a going concern. However, management has
identified material uncertainties that may cast significant doubt on the ability of the Group to continue as a going concern. As a result, the Group may be unable to realize its assets and discharge its liabilities in the normal course of
business.
8
The Group is an early-stage and emerging growth company. The Group has incurred significant debt primarily to fund operating expenses and finance
the construction projects mentioned in note 1 (a). As of June 30, 2024, total current liabilities exceed the amount of total current assets, and based upon the Group’s current plans, management believes that financial resources to fund its
operations for the twelve months subsequent to the authorization and issuance of these condensed consolidated and combined interim financial statements may be insufficient.
In addition, as of and after June 30, 2024, certain covenants have been breached as follows:
| i. |
The debt service reserve account related to the Insurgentes 421 loan with Bancomext were not funded on several dates in accordance with the loan agreements, the latest on August 8, 2024, and as a result the covenant was breached. The
Group received a waiver on August 26, 2024, extending the payment on the debt service reserve account to October 4, 2024. An additional waiver was also received to extend the delivery of 2023 audited financial statements until September
30, 2024. The lender also confirmed that as of June 30, 2024, there are no events of payment default or default of other contractual obligations other than those described above, and the letter of waiver cured the breaches described
above.
|
As of June 30, 2024, the loan amount outstanding was $1,819.2 million, which was classified as a current liability since the breach was prior to
the reporting date.
| ii. |
On August 1, 2024, there was a default relating to funding of the debt service reserve account on the syndicated secured mortgage loan held by Fideicomiso Murano 2000, as well as a default related to the acquisition of financial
derivatives on the same date. On August 26, a waiver was received for the breaches mentioned above, waiving the events of default until October 31, 2024. An additional waiver was also received to extend the delivery of 2023 audited
financial statements until October 31, 2024.
|
On August 26, 2024, the Group received a waiver from the lenders of the Fideicomiso Murano 2000 syndicated secure mortgage loan authorizing a delay
on the payment of the quarterly interest until October 31, 2024, curing a technical breach until that date. On August 5, 2024, there was a technical default on a covenant with respect to the quarterly interest payment of the syndicated secured
mortgage loan held by Fideicomiso Murano 2000. The reason for the payment delay was a postponement in the closing of a financing transaction, whereby the proceeds expected from such transaction were intended to repay in full the syndicated
secured mortgage loan held by Fideicomiso Murano 2000. Management now expects the financing transaction to be closed prior to October 31, 2024. Management has kept the lenders of the syndicated secured mortgage loan fully informed of the progress
of the intended financing and has worked closely with the lenders.
In connection with the syndicated secured mortgage loan held by Fideicomiso Murano 2000, on May 2, 2024, Murano World (joint obligor of Fideicomiso Murano 2000) received a $317 million
loan with ES Agrupacion, breaching a covenant. The lender agreed to convert it into a minority equity interest in Cancun II project, therefore the Group believes that the breach described will be cured upon conversion. On May 20, 2024
Fideicomiso Murano 2000 granted to ES Agrupacion U.S.$1.85 million loan, breaching a covenant. The Group has not formally requested a waiver from the lenders under Fideicomiso Murano 2000 syndicated secure mortgage loan given that the loan to
ES Agrupacion is expected to be repaid in full in the short term.
As of June 30, 2024, the Fideicomiso Murano 2000 syndicated secure mortgage loan amount outstanding was $4,407.1 million, which was classified as a
current liability since the breaches were prior to the reporting date.
| iii. |
Under certain financing arrangements the Group is obliged to deliver internal financial information and audited financial statements to lenders. The Group delivered its unaudited financial information for March 31, 2024, late. The
interim unaudited information for June 30, 2024, was delivered on time. In addition, the Group failed to deliver annual audited financial statements for December 31, 2023, by June 30, 2024, resulting in breaches. As mentioned above, the
Inmobiliaria Insurgentes 421 and Fideicomiso Murano 2000 loans, received waivers to deliver the 2023 audited financial statements by September 30, 2024, and October 31, 2024, respectively. The Group has requested waivers from other
lenders and expects to deliver the audited information in the short term.
|
9
Management continues evaluating strategies to obtain the required additional funding necessary for future operations, to comply with all covenants
as required by the loan agreements, and to be able to discharge the outstanding debt and other liabilities as they become due. In assessing these strategies, management has considered the available cash resources, inflows from the hotels that are
already in operation, and future financing options available to the Group such as new or restructured loan agreements and the possible financial support of the major shareholder of the Group. However, the Group may be unable to access further
equity or debt financing when needed. As such, there can be no assurance that the Group will be able to obtain additional liquidity when needed or under acceptable terms, if at all.
These condensed consolidated and combined interim financial statements do not include any adjustments to the carrying amounts and classifications
of assets and liabilities and reported expenses that may otherwise be required if the going concern basis for the Group as of and for the six months ended June 30, 2024, and for entities comprising the Group as of December 31, 2023 and for the
six months ended June 30, 2023, were not appropriate.
| d. |
Use of judgments and estimates
|
In preparing these condensed consolidated and combined interim financial statements, management has made judgments and estimates that affect the
application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
The significant judgments made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the
same as those described in the Murano Group’s last annual audited combined financial statements as of December 31, 2023.
Measurement of fair values:
A number of the Group’s accounting policies require the measurement of fair values, for both financial assets and liabilities and non-financial
assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall
responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the chief financial officer.
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes
or pricing services, is used to measure fair values, the valuation team assesses the evidence obtained from the third parties to support the conclusion that these valuations meet the requirements of the Accounting Standards, including the level
in the fair value hierarchy in which the valuations should be classified.
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorized
into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:
| • |
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
|
| • |
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
|
| • |
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
|
10
If the inputs used to measure the fair value of an asset or a liability are categorized in different levels of the fair value hierarchy, then the
fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
| e. |
Material accounting policies
|
These condensed consolidated and combined interim financial statements follow the same accounting policies and methods of computation as the last
annual combined financial statements, except for the consolidation accounting policy, as explained in note 2.b.
| f. |
New accounting standards or amendments for 2024 and forthcoming requirements
|
A number of new accounting standards and amendments to accounting standards are effective for annual periods beginning after January 1, 2024 and
have been adopted by the Group. Their adoption has not had any material impact on the disclosure or the amounts reported in these condensed consolidated and combined interim financial statements. The Group has not early adopted any forthcoming
new or amended accounting standards in preparing these condensed consolidated and combined interim financial statements. The Group does not expect to have a significant impact from the adoption of the forthcoming standards.
| 3. |
Cash and cash equivalents and restricted cash
|
As of June 30, 2024 and December 31, 2023 cash and cash equivalents and restricted cash is as follows:
|
As of
|
||||||||
|
June 30, 2024
|
December 31, 2023
|
|||||||
|
Cash
|
$
|
1,784,770
|
$
|
993,681
|
||||
|
Bank deposits (1) (2)
|
124,135,952
|
145,376,053
|
||||||
|
Total cash and cash equivalents and restricted cash
|
$
|
125,920,722
|
$
|
146,369,734
|
||||
| (1) |
Fideicomiso Murano 2000 - In accordance with the long-term syndicated loan among Bancomext, Sabadell, Caixabank, NAFIN, Avantta, Fideicomiso Murano 2000 (a subsidiary of Murano World) must maintain an interest reserve fund equivalent
to a minimum of one quarterly interest payment. While the amount can be withdrawn to pay such interest without any penalty, Fideicomiso Murano 2000 is obligated to replace such interest reserve fund to a set minimum amount. As of June 30,
2024 and December 31, 2023, the corresponding amounts in the reserve fund were $120,767 and $12,842,404, respectively.
|
| (2) |
Inmobiliaria Insurgentes 421 - In accordance with the long-term loan from Bancomext, the borrower must maintain a debt service reserve fund equivalent to the next amortization of principal payment plus interest, according to the
amortization schedule, and an additional fund for an amount equivalent to the principal debt service reserve fund. While the amount can be withdrawn without penalty to cover payments, the borrower is obligated to replace such reserve
funds within 15 days. As of June 30, 2024 and December 31, 2023, the principal reserve fund amounted to $41,993,810 and $52,272,015, respectively. The additional debt service reserve fund was not fully funded as of June 30, 2024 and
December 31, 2023; for further information see note 6.
|
| 4. |
Related-party transactions and balances-
|
Transactions with key management personnel
| i. |
Key management personnel compensation
|
11
Compensation of key management personnel includes short-term employee benefits in the amount of $5,378,282 and $5,673,669 for the six-month
periods ended June 30, 2024 and 2023, respectively.
| ii. |
Outstanding balances with related parties as of June 30, 2024 and December 31, 2023 are as follows:
|
|
As of
|
||||||||
|
June 30, 2024
|
December 31, 2023
|
|||||||
|
Receivable
|
||||||||
|
Affiliate:
|
||||||||
|
Elías Sacal Cababie(1)
|
$
|
5,226,672
|
$
|
104,029,840
|
||||
|
E.S. Agrupación, S. A. de C. V. (2)
|
81,317,204
|
35,582,383
|
||||||
|
Marcos Sacal Cohen (3)
|
9,916
|
540,031
|
||||||
|
Edgar Armando Padilla Pérez (4)
|
-
|
1,700,466
|
||||||
|
Rubén Álvarez Laris (5)
|
-
|
1,696,426
|
||||||
|
Total related parties receivable
|
86,553,792
|
143,549,146
|
||||||
|
As of
|
||||||||
|
June 30, 2024
|
December 31, 2023
|
|||||||
|
Payable:
|
||||||||
|
Affiliate:
|
||||||||
|
Impulsora Turística de Vallarta, S. A. de C. V. (6)
|
$
|
52,035,500
|
$
|
39,121,151
|
||||
|
Sofoplus S.A.P.I de C. V., SOFOM ER(7)
|
199,003,153
|
171,153,445
|
||||||
|
ES Agrupación, S. A. de C. V. (8)
|
317,000,000
|
-
|
||||||
|
BVG Infraestructura, S. A. de C. V. (9)
|
8,663,969
|
10,030,992
|
||||||
|
Murano Global Investments, Plc.
|
2,095
|
-
|
||||||
|
Total related parties payable
|
576,704,717
|
220,305,588
|
||||||
|
Current portion
|
$
|
546,699,806
|
$
|
133,002,659
|
||||
|
Long-term portion
|
$
|
30,004,911
|
$
|
87,302,929
|
||||
| (1) |
This balance is composed of several loan agreements as follows:
|
| i. |
On February 10, 2023, Murano World granted a short-term loan of U.S.$2,865,000 with a maturity of one year that accrues interest at a rate of 3M SOFR plus a spread of 3%. On February 10, 2024 the maturity was extended for a year and o;
On April 30, 2024 the principal amount was repaid in full;
|
| ii. |
On April 14, 2023, Murano P.V. granted a short-term loan of $2,000,000 with a maturity of one year that accrues interest at a rate of TIIE 28 days plus a spread of 3%. The principal amount was repaid on March 8, 2024 as part of the
capital restructuring as described in Note 2.b.2;
|
| iii. |
On April 14, 2023, Murano P.V. granted a short-term loan of U.S.$438,611 with a maturity of one year that accrues interest at a rate of 3M SOFR plus a spread of 3%. The principal amount was paid on March 8, 2024 as part of the capital
restructuring as described in Note 2.b.2;
|
| iv. |
On September 26, 2023, Murano World granted a short-term loan of U.S.$3,200,000 with a maturity of one year that accrues interest at a rate of 3M SOFR plus a spread of 3%. On April 30, 2024 the principal amount was repaid in full;
|
| v. |
On January 19, 2024, Murano World granted a short-term loan up to $7,900,000 with a maturity of one year that accrues interest at a rate of TIIE 28 days plus a spread of 3%. On April 30, 2024 the borrower paid $6,700,000. As of June
30, 2024, the outstanding balance was $1,200,000 of principal and $46,728 accrued interest;
|
| vi. |
On January 19, 2024, Murano World granted a short-term loan up to U.S.$3,360,000 with a maturity of one year that accrues interest at a rate of 3M SOFR plus a spread of 3%. On April 30, 2024 the borrower paid U.S.$3,160,000. The
outstanding balance of this loan as of June 30, 2024 was $3,675,460 (U.S.$200,000) of principal and $304,484 (U.S.$16,567) accrued interest;
|
12
| (2) |
This balance is composed of several loan agreements as follows:
|
| i. |
On February 10, 2023, Murano World granted a short-term loan of $9,620,660 with a maturity of one year that accrues interest at a rate of TIIE 28 days plus a spread of 3%. On February 10, 2024 the maturity was extended for one year;
|
| ii. |
On March 31, 2023, Murano World granted a short-term loan of U.S.$453,000 with a maturity of one year that accrues interest at a rate of 3M SOFR plus a spread of 3%. On March 31, 2024 the maturity was extended for a year;
|
| iii. |
On April 14, 2023, Murano P.V. granted a short-term loan of U.S.$359,368 with a maturity of one year that accrues interest at a rate of 3M SOFR plus a spread of 3%. The principal amount was paid on March 8, 2024 as part of the capital
restructuring as described in Note 2.b.2;
|
| iv. |
On May 5, 2023, Murano P.V. granted a short-term loan of $30,000 with a maturity of one year that accrues interest at a rate of TIIE 28 days plus a spread of 3%. The principal amount was paid on March 8, 2024 as part of the capital
restructuring as described in Note 2.b.2;
|
| v. |
On November 9, 2023, Murano World granted a short-term loan of $10,000,000 with a maturity of one year that accrues interest at a rate of TIIE 28 days plus a spread of 3%.
|
| vi. |
On May 2, 2024, Murano World granted a loan of up to $14,750,000 to ES Agrupación, S. A. de C. V., which matures in a year and accrues interest at a rate of TIIE 28 days plus a spread of 3%.
|
| vii. |
On May 20, 2024, Murano World granted a loan of up to U.S.$1,850,000 to ES Agrupación, S. A. de C. V., which matures in one year that accrues interest at a rate of SOFR plus a spread of 3%. See note 2cii.
|
| viii. |
As of June 30, 2024 the accrued interest for the loans in Mexican pesos and American dollars described above is $2,942,561 and $1,681,061 (U.S.$91,475), respectively.
|
| (3) |
Short-term loan agreement granted by Murano PV, S. A. de C. V. for $492,000 dated May 5, 2023 with a one-year maturity that accrues interest at a rate of TIIE 28 days plus a spread of 3%. The principal amount was paid on March 8, 2024
as part of the capital restructuring as described in Note 2.b.2.
|
| (4) |
This balance is composed of two loan agreements as follows:
|
| i. |
On May 5, 2023 Murano Management, S. A. de C. V. granted a short-term loan of $1,546,669 (Mexican pesos) with a maturity of one year that accrues interest at a rate of TIIE 28 days plus a spread of 3%. The principal amount was paid on
March 8, 2024 as part of the capital restructuring as described in Note 2.b.2;
|
| ii. |
On May 5, 2023 Murano Management, S. A. de C. V. granted a short-term loan of $4,400 (Mexican pesos) with a maturity of one year that accrues interest at a rate of TIIE 28 days plus a spread of 3%. The principal amount was paid on
March 8, 2024 as part of the capital restructuring as described in Note 2.b.2.
|
| (5) |
Short-term loan agreement of $1,547,609 dated May 5, 2023 granted by Murano Management with a one-year maturity that accrues interest at a rate of TIIE 28 days plus a spread of 3%. The principal amount was paid on March 8, 2024 as part
of the capital restructuring as described in Note 2.b.2.
|
| (6) |
Loan agreement granted to Murano World signed on May 2, 2021 with a 36-month termination period. The amount of the loan is $97,500,000 at an annual rate of 17.75%. On May 2, 2024 the maturity of this loan was extended for one year. On
April 30, 2024, Impulsora Turística de Vallarta granted a 36-month loan to Murano World in the amount of $17,200,000 with an interest rate of 17.75% and payments of principal after 12 months of the
signing date. As of June 30, 2024 the outstanding balance of both loans is $34,143,716 and $17,200,000, respectively.
|
| (7) |
Syndicated secured mortgage loan for up to U.S.$30,000,000 (U.S.15,000,000 granted by Exitus and U.S.$15,000,000 granted by Sofoplus) which matures on June 24, 2025 and causes interest at an annual rate of 15.00% for which the major
shareholders are joint obligors.
|
| (8) |
On May 2, 2024, ES Agrupación, S. A. de C. V. granted a loan of $317,000,000 to Murano World. The lender has agreed to convert the loan balance into a small minority equity interest in the Cancun II project, with the exact terms to be
finalized over the coming months and therefore the Group believes that the breach described in note 2c ii., will be cured.
|
| (9) |
On March 1, 2023, Inmobiliaria Insurgentes obtained a short-term loan granted by BVG Infraestructura, S. A. de C. V. of U.S.$955,011 with a maturity of one year that accrues interest at a rate of 3M SOFR plus a spread of 3%. On March
1, 2024 the maturity of this loan was extended for one year.
|
13
| 5. |
Property, construction in process and equipment
|
Reconciliation of carrying amounts
|
Construction in
|
Computer
|
Transportation
|
Equipment and
|
|||||||||||||||||||||||||||||||||
|
Land
|
process
|
Buildings
|
Elevators
|
equipment
|
Equipment
|
Furniture(1)
|
other assets
|
Total
|
||||||||||||||||||||||||||||
|
Cost:
|
||||||||||||||||||||||||||||||||||||
|
Balances as of January 1, 2023
|
$
|
7,794,417,256
|
$
|
9,083,995,555
|
$
|
$
|
$
|
7,109,323
|
$
|
2,874,688
|
$
|
5,694,946
|
$
|
3,173,881
|
$
|
16,897,265,649
|
||||||||||||||||||||
|
Additions
|
173,992,200
|
1,388,105,617
|
-
|
-
|
627,269
|
-
|
157,205,729
|
-
|
1,719,930,815
|
|||||||||||||||||||||||||||
|
Disposals
|
-
|
-
|
-
|
-
|
-
|
-
|
(163,689,130
|
)
|
-
|
(163,689,130
|
)
|
|||||||||||||||||||||||||
|
Capitalization of FF&E and OS&E, buildings and elevators
|
-
|
(1,525,827,023
|
)
|
1,348,289,068
|
10,964,935
|
-
|
-
|
166,573,020
|
-
|
-
|
||||||||||||||||||||||||||
|
Revaluation
|
(21,598,770
|
)
|
(2,437,323,707
|
)
|
1,568,940,131
|
-
|
-
|
-
|
(889,982,346
|
)
|
||||||||||||||||||||||||||
|
Balances as of December 31, 2023
|
$
|
7,946,810,686
|
$
|
6,508,950,442
|
$
|
2,917,229,199
|
$
|
10,964,935
|
$
|
7,736,592
|
$
|
2,874,688
|
$
|
165,784,565
|
$
|
3,173,881
|
$
|
17,563,524,988
|
||||||||||||||||||
|
Balances as of January 1, 2024
|
$
|
7,946,810,686
|
$
|
6,508,950,442
|
$
|
2,917,229,199
|
$
|
10,964,935
|
$
|
7,736,592
|
$
|
2,874,688
|
$
|
165,784,565
|
$
|
3,173,881
|
$
|
17,563,524,988
|
||||||||||||||||||
|
Additions
|
935,152,963
|
-
|
-
|
66,597
|
-
|
25,501
|
-
|
935,245,061
|
||||||||||||||||||||||||||||
|
Capitalization of FF&E and OS&E, buildings and elevators
|
-
|
(3,348,164,727
|
)
|
3,073,596,455
|
10,070,998
|
-
|
264,497,274
|
-
|
-
|
|||||||||||||||||||||||||||
|
Balances as of June 30, 2024
|
$
|
7,946,810,686
|
$
|
4,095,938,678
|
$
|
5,990,825,654
|
$
|
21,035,933
|
$
|
7,803,189
|
$
|
2,874,688
|
$
|
430,307,340
|
$
|
3,173,881
|
$
|
18,498,770,049
|
||||||||||||||||||
|
Construction in
|
Computer
|
Transportation
|
Equipment and
|
|||||||||||||||||||||||||||||||||
|
Land
|
process
|
Buildings
|
Elevators
|
equipment
|
Equipment
|
Furniture(1)
|
other assets
|
Total
|
||||||||||||||||||||||||||||
|
Accumulated depreciation:
|
||||||||||||||||||||||||||||||||||||
|
Balances as of January 1, 2023
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
(5,892,011
|
)
|
$
|
(2,626,601
|
)
|
$
|
(4,079,955
|
)
|
$
|
(2,183,253
|
)
|
$
|
(14,781,820
|
)
|
|||||||||||||
|
Depreciation
|
-
|
-
|
(71,580,551
|
)
|
(1,096,493
|
)
|
(779,108
|
)
|
(77,491
|
)
|
(55,029,094
|
)
|
(152,462
|
)
|
(128,715,199
|
)
|
||||||||||||||||||||
|
Balances as of December 31, 2023
|
-
|
-
|
(71,580,551
|
)
|
(1,096,493
|
)
|
(6,671,119
|
)
|
(2,704,092
|
)
|
(59,109,049
|
)
|
(2,335,715
|
)
|
(143,497,019
|
)
|
||||||||||||||||||||
|
Balances as of January 1, 2024
|
-
|
-
|
(71,580,551
|
)
|
(1,096,493
|
)
|
(6,671,119
|
)
|
(2,704,092
|
)
|
(59,109,049
|
)
|
(2,335,715
|
)
|
(143,497,019
|
)
|
||||||||||||||||||||
|
Depreciation
|
-
|
-
|
(54,620,841
|
)
|
(799,205
|
)
|
(385,495
|
)
|
(36,750
|
)
|
(48,464,856
|
)
|
(76,101
|
)
|
(104,383,248
|
)
|
||||||||||||||||||||
|
Balances as of June 30, 2024
|
-
|
-
|
(126,201,392
|
)
|
(1,895,698
|
)
|
(7,056,614
|
)
|
(2,740,842
|
)
|
(107,573,905
|
)
|
(2,411,816
|
)
|
(247,880,267
|
)
|
||||||||||||||||||||
|
Carrying amounts as of:
|
||||||||||||||||||||||||||||||||||||
|
December 31, 2023
|
$
|
7,946,810,686
|
$
|
6,508,950,442
|
$
|
2,845,648,648
|
$
|
9,868,442
|
$
|
1,065,473
|
$
|
170,596
|
$
|
106,675,516
|
$
|
838,166
|
$
|
17,420,027,969
|
||||||||||||||||||
|
June 30, 2024
|
$
|
7,946,810,686
|
$
|
4,095,938,678
|
$
|
5,864,624,262
|
$
|
19,140,235
|
$
|
746,575
|
$
|
133,846
|
$
|
322,733,435
|
$
|
762,065
|
$
|
18,250,889,782
|
||||||||||||||||||
| (1) |
Includes FF&E and OS&E assets.
|
14
Construction in process
GIC I is a hotel complex with up to 1,016 rooms, currently under construction in Cancun,
Quintana Roo; the total amount expected to be invested in the construction is $3,200,000,000, excluding
land and financial costs. For the six-month period ended June 30, 2024, and the year ended December 31, 2023, construction cost incurred were $935,152,963 and $1,106,639,896, respectively.
Quintana Roo; the total amount expected to be invested in the construction is $3,200,000,000, excluding
land and financial costs. For the six-month period ended June 30, 2024, and the year ended December 31, 2023, construction cost incurred were $935,152,963 and $1,106,639,896, respectively.
GIC II is a plot of land located in Cancun, Quintana Roo, where the Group plans to develop a second hotel project with up to
2,000 rooms. For the six-month period ended June 30, 2024, and the year ended December 31, 2023, construction costs incurred were $3,235,995 and $1,577,714, respectively.
Insurgentes Hotel is a hotel complex comprising two individual hotels with a combined capacity of 396 rooms, located in
Mexico City. This hotel commenced operations in the first quarter of 2023. For the year ended December 31, 2023, construction costs incurred were $79,064,992. As of June 30, 2024 there were no additional capitalized costs incurred for the
property.
Capitalization of borrowing cost included in the construction costs of the above-described hotel complexes, for the
six-month period ended June 30, 2024 and for the year ended December 31, 2023 was $222,615,785 and $275,133,471, respectively. These borrowing costs were calculated using a capitalization rate of 100% since all the loans held by the Group are
specific and directly attributable to the construction in process.
Measurement of fair value
Land and construction in process
Fair value hierarchy
The Group engages third-party qualified appraisers to perform the valuation of the land and construction in process annually. The technical
committee works closely with qualified external appraisers to establish the appropriate valuation techniques and inputs to the model.
The fair value measurement for the land and construction in process has been categorized as a Level 3 fair value based on the inputs to the
valuation technique used. Changes in fair value are recognized in Other Comprehensive Income (OCI).
Valuation technique and significant unobservable inputs
The following table shows the valuation technique used in measuring the fair value of the land and construction in process, as well as the
significant unobservable inputs used.
The revaluation loss as of December 31, 2023 was $889,982,346. The Group did not revalue the assets for the interim period ended June 30, 2024 and
2023 as no factors or indicators were identified that could give rise to a material change in the fair value from the prior period revaluation.
15
|
Valuation technique
|
Significant unobservable inputs
|
Inter-relationship between
significant unobservable
inputs and fair value
measurement
|
||
|
Land
Group directors use the market-based approach to determine the value of the land as described in the valuation reports prepared by the appraisers.
In estimating the fair value of the subject assets, the appraiser performed the following:
• Researched market data to obtain information
pertaining to sales and listings (comps) that are similar to the Subject Asset.
• Selected relevant units of comparison (e.g.,
price per square meter), and developed a comparative analysis for each.
• Compared the comps to the Subject Asset using
elements of comparison that may include, but are not limited to, market conditions, location, and physical characteristics; and adjusted the comps as appropriate.
• Reconciled the multiple value indications that
resulted from the adjustment of the comps into a single value indication.
• The selected price per square meter is
consistent with market prices paid by market participants and/or current asking market prices for comparable properties.
|
The appraiser compared the comps to the Subject Assets using comparison elements that include market conditions, location, and physical characteristics.
• Location (0.80 - 1).
• Size (1.08 - 1.20).
• Market conditions (0.8 - 1).
|
The estimated fair value would increase if the adjustments applied were higher.
|
|
Construction in process
Group directors use the cost approach to determine the value of construction in process as described in the valuation reports prepared by the appraisers.
In estimating the fair value of building and site improvements, the appraiser performed the following:
• Estimated
replacement cost of the building and site improvements, as though new, considering items such as indirect costs.
• Estimated and
applied deductions related to accrued depreciation, resulting from physical deterioration, and work in progress.
|
The appraiser used an adjustment factor regarding the status of the construction in process.
Work in progress adjustment (0.6 - 0.98).
|
The estimated fair value would increase if the adjustments applied were higher.
|
16
Carrying amount
Had the Group’s land and construction in process been measured on a historical cost basis, their carrying amount would have been as follows:
|
As of
|
||||||||
|
June 30, 2024
|
December 31, 2023
|
|||||||
|
Land
|
$
|
673,294,661
|
$
|
673,294,661
|
||||
|
Construction in process
|
2,797,888,139
|
5,276,177,102
|
||||||
|
Total
|
$
|
3,471,182,800
|
$
|
5,949,471,763
|
||||
Security
As of June 30, 2024 and December 31, 2023, properties with carrying amount of $18,158,106,422, and $17,694,421,947, respectively, were subject to
a registered debenture that forms part of the security for certain bank loans (see Note 6). A list of the properties and related loans is as follows:
|
Property
|
Associated Credit Reference
|
|
Unit 1, 2, 4 y 5 / Grand Island
|
See Note 6 Terms and repayment schedule (1)
|
|
Unit 3 / Grand Island II
|
See Note 6 Terms and repayment schedule (12)
|
|
Beach Club – Playa Delfines
|
See Note 6 Terms and repayment schedule (8)
|
|
Insurgentes Sur 421 Complex
|
See Note 6 Terms and repayment schedule (3)
|
|
Unit 8, No. 56-A-1, Supermanzana A2, Sup. 824.20 M2
|
See Note 6 Terms and repayment schedule (4)
and Note 4 reference (7)
|
|
Unit 9, No. 56-A-1, Supermanzana A2, Sup. 832.94 M2
|
|
|
Plot of land: La Punta Bajamar / Lote 1, Manzana S/M, Sup. 4,117.88 M2
|
See Note 6 Terms and repayment schedule (7)
|
|
Plot of land: La Punta Bajamar / Lote 2, Manzana S/M, Sup. 6,294.08 M2
|
See Note 6 Terms and repayment schedule (7)
|
|
Plot of land: La Punta Bajamar / Lote 3 (Vialidad), Manzana S/M, Sup. 4,117.88 M2
|
See Note 6 Terms and repayment schedule (7)
|
|
Plot of land: La Punta Bajamar / Lote 4, Manzana S/M, Sup. 10,015.68 M2
|
See Note 6 Terms and repayment schedule (7)
|
|
Plot of land: La Punta Bajamar / Lote 5, Manzana S/M, Sup. 11,986.53 M2
|
See Note 6 Terms and repayment schedule (7)
|
|
Plot of land: La Punta Bajamar / Lote 6, Manzana S/M, Sup. 2,912.02 M2
|
See Note 6 Terms and repayment schedule (7)
|
|
Plot of land: La Punta Bajamar / Lote 7, Manzana S/M, Sup. 568.51 M2
|
See Note 6 Terms and repayment schedule (7)
|
|
Plot of land: La Punta Bajamar / Lote 8, Manzana S/M, Sup. 635.25 M2
|
See Note 6 Terms and repayment schedule (7)
|
| 6. |
Investment property
|
Investment property is initially measured at cost and subsequently at fair value with any change therein recognized in profit and loss.
The Group did not revalue the investment property for the interim period ended June 30, 2024 and 2023 as no factors or indicators were identified
that could give rise to a material change in the fair value from the prior period revaluation.
17
| 7. |
Long-term debt
|
|
As of
|
||||||||
|
June 30, 2024
|
December 31, 2023
|
|||||||
|
Current liabilities:
|
||||||||
|
Current portion of secured bank loans
|
$
|
6,817,795,818
|
$
|
1,866,499,269
|
||||
|
Unsecured bank loans
|
44,956,357
|
64,827,258
|
||||||
|
Interest
|
149,526,759
|
108,029,151
|
||||||
|
Total current liabilities
|
$
|
7,012,278,934
|
$
|
2,039,355,678
|
||||
|
Non-current liabilities:
|
||||||||
|
Secured bank loan
|
$
|
1,136,530,304
|
$
|
4,641,315,619
|
||||
|
Unsecured bank loans
|
-
|
2,001,517
|
||||||
|
Total non-current liabilities
|
$
|
1,136,530,304
|
$
|
4,643,317,136
|
||||
The secured bank loans are secured over land and construction in process with a carrying amount of $19,258,597,911 and
$17,694,421,947 as of June 30, 2024 and December 31, 2023, respectively.
|
As of
|
|||||||||||||||||||
|
Currency
|
Nominal interest rate 2024
|
Nominal interest rate 2023
|
Maturity
|
June 30, 2024
|
December 31, 2023
|
||||||||||||||
|
Fideicomiso Murano 2000 CIB/3001 (subsidiary of Murano World):
|
|||||||||||||||||||
|
Banco Nacional de Comercio Exterior S.N.C. Institución de Banca de Desarrollo (“Bancomext”) (1)
|
USD
|
SOFR + 4.0116%
|
SOFR + 4.0116%
|
2033
|
$
|
1,102,638,000
|
$
|
1,013,610,000
|
|||||||||||
|
Caixabank, S.A. Institución de Banca Múltiple (“Caixabank”) (1)
|
USD
|
SOFR + 4.0116%
|
SOFR + 4.0116%
|
2033
|
1,102,638,000
|
1,013,610,000
|
|||||||||||||
|
Sabadell, S.A. Institución de Banca Múltiple (“Sabadell”) (1)
|
USD
|
SOFR + 4.0116%
|
SOFR + 4.0116%
|
2033
|
992,374,200
|
844,675,000
|
|||||||||||||
|
Avantta Sentir Común, S. A. de C.V., SOFOM, E.N.R. (Avantta) (1)
|
USD
|
SOFR + 4.0116%
|
N/A
|
2033
|
110,263,800
|
||||||||||||||
|
Nacional Financiera, Sociedad Nacional de Crédito, Institución de Banca de Desarrollo (“NAFIN”) (1)
|
USD
|
SOFR + 4.0116%
|
SOFR + 4.0116%
|
2033
|
1,099,167,438
|
1,010,419,654
|
|||||||||||||
|
Bancomext (2)
|
MXN
|
TIIE 91 + 2.75%
|
TIIE 91 + 2.75%
|
See (2)
|
202,751,620
|
54,441,003
|
|||||||||||||
|
Cost to obtain loans and commissions
|
(43,190,364
|
)
|
(46,187,476
|
)
|
|||||||||||||||
|
Total Fideicomiso Murano 2000
|
4,566,642,694
|
3,890,568,181
|
|||||||||||||||||
|
Inmobiliaria Insurgentes 421:
|
|||||||||||||||||||
|
Bancomext (3)
|
USD
|
SOFR + 3.5%
|
SOFR + 3.5%
|
2037
|
1,819,153,199
|
1,687,477,257
|
|||||||||||||
|
Cost to obtain loans and commissions
|
(17,710,573
|
)
|
(18,383,126
|
)
|
|||||||||||||||
|
Total Inmobiliaria Insurgentes 421
|
1,801,442,626
|
1,669,094,131
|
|||||||||||||||||
|
Murano World:
|
|||||||||||||||||||
|
Exitus Capital S.A.P.I de C. V. ENR (“Exitus Capital”) (4)
|
USD
|
15.00%
|
|
15.00%
|
|
2025
|
275,659,500
|
253,402,500
|
|||||||||||
|
Exitus Capital (5)
|
USD
|
15.00%
|
|
15.00%
|
|
2025
|
13,145,228
|
14,862,566
|
|||||||||||
|
Exitus Capital (6)
|
USD
|
15.00%
|
|
15.00%
|
|
2025
|
44,730,556
|
18,391,571
|
|||||||||||
|
Arrendadora Fínamo, S.A. de C.V. (“Fínamo”) (7)
|
MXN
|
15.76%
|
|
15.76%
|
|
2027
|
332,720,752
|
364,390,142
|
|||||||||||
|
ALG (8)
|
USD
|
10%
|
|
10%
|
|
2030
|
367,546,000
|
337,870,000
|
|||||||||||
|
Santander International (9)
|
USD
|
Best Rate+0.80%
|
Best Rate+0.80%
|
2025
|
36,740,747
|
25,335,608
|
|||||||||||||
|
Cost to obtain loans and commissions
|
(9,746,006
|
)
|
(11,658,806
|
)
|
|||||||||||||||
|
Total Murano World
|
1,060,796,777
|
1,002,593,581
|
|||||||||||||||||
|
Edificaciones BVG:
|
|||||||||||||||||||
|
Exitus Capital (10)
|
8,215,610
|
12,387,770
|
|||||||||||||||||
|
Total Edificaciones BVG
|
8,215,610
|
12,387,770
|
|||||||||||||||||
|
Murano PV:
|
|||||||||||||||||||
|
Administradora de Soluciones de Capital, S.A. de C.V. SOFOM NR (ASC Finamo) (11)
|
USD
|
15%
|
|
-
|
2030
|
477,809,800
|
|||||||||||||
|
ASC Finamo (12)
|
MXN
|
22%
|
|
-
|
2024
|
100,000,000
|
|||||||||||||
|
Cost to obtain loans and commissions
|
(15,625,028
|
)
|
-
|
||||||||||||||||
|
Total Murano PV
|
562,184,772
|
-
|
|||||||||||||||||
|
Accrued interest payable
|
149,526,759
|
108,029,151
|
|||||||||||||||||
|
Total debt
|
8,148,809,238
|
6,682,672,814
|
|||||||||||||||||
|
Current instalments
|
7,012,278,934
|
2,039,355,678
|
|||||||||||||||||
|
Long-term debt, excluding current instalments
|
$
|
1,136,530,304
|
$
|
4,643,317,136
|
|||||||||||||||
18
| (1) |
Syndicated secured mortgage loan of up to U.S.$160,000,000. Operadora GIC I is jointly liable for this loan as well as Murano World. On July 11, 2022 NAFIN joined the syndicated loan under the same terms as the other lenders, granting
U.S.$34,811,150 to Fideicomiso 2000.
|
On August 24, 2023 the Group restructured the syndicated loan to increase the credit line by U.S.$45,000,000, with a
variable interest rate based on the quarterly SOFR rate with a fixed spread of 4.0116%. The credit extension was documented through two tranches of debt:
Tranche B of U.S.$35,000,000 to be used to finalize the construction of phase I of the GIC Complex and Tranche C of
U.S.$10,000,000 to be used to cover additional project costs and capital requirements for the development of the GIC Complex. NAFIN is funding U.S.$35,000,000 under Tranche B and Sabadell is funding the remaining U.S.$10,000,000 under
Tranche C to Fideicomiso Murano 2000.
On February 1, 2024, the Group received U.S.$6,000,000 related to Tranche C.
On April 9, 2024, an amendment to the syndicated secured mortgage loan of Fideicomiso Murano 2000 was signed by and between Avantta Sentir Común,
S. A. de C.V., SOFOM, E.N.R., as adherent creditor and assignee, Sabcapital, S.A. de C.V., SOFOM, E.R., as the assignor, with the appearance of Sabadell in its capacity as administrative and collateral whereby the assignor assigned and
transferred to the assignee its rights and obligations owned as a Tranche C creditor representing 60% of the tranche C commitment, amounting to U.S. $6,000,000.00 as the assigned amount.
On May 14, 2024, the Group received the remaining U.S.$4,000,000 related to the tranche C of this Syndicated loan.
The loan maturity date is February 5, 2033. The agreement is subject to Mexican laws and the jurisdiction of the courts of Mexico
City. The loan agreement includes the plot of land number 2 and the beach club – Playa Delfines of the Cancun complex as new guarantees.
| (2) |
Secured loan under a credit line of up to U.S. $31,480,000 to finance VAT receivable with a 36-month maturity or earlier on collection of such VAT receivables from Mexican Authorities, with unpaid balances, if any, after 36 months
payable within 18 months.
|
On December 18, 2023 the Group and the lender extended the maturity period of this loan to December 2024.
On April 11, 2024 and May 24, 2024, the Group received $137,615,652 and $63,051,049, respectively.
| (3) |
On October 18, 2018, Inmobiliaria Insurgentes 421 obtained a U.S.$49,753,000 unsecured loan. This loan was renegotiated to U.S.$75,00,000 on October 10, 2022, with this loan, the Group repaid fully the first loan, including interest.
This loan is secured by the Insurgentes Complex with OHI421 and OHI421 Premium jointly liable.
|
In May 2023, the Group restructured this loan with an increase of U.S.$25,000,000 giving a total credit line of U.S.$100,000,000.
On April 4, 2024, the Group amended the loan agreement between Inmobiliaria Insurgentes 421 and Bancomext. The main change included
reducing the amount of the principal payments from April 2024 to April 2025, as well as receiving an event of default waiver from Bancomext, in connection with the borrower’s funding obligations in respect of the debt service reserve accounts.
The parties executed an amendment and waiver agreement to provide new terms and conditions with respect to the funding obligations of the debt service reserve accounts. As of April 4, 2024, these events of default were waived by the lender (see
Note 2c).
| (4) |
Syndicated secured mortgage loan of U.S.$30,000,000 (U.S.15,000,000 granted by Exitus and U.S.$15,000,000 granted by Sofoplus) with the major shareholders of the Group as joint obligors. This loan matures on November 2025.
|
| (5) |
Loan agreement up to U.S.$2,500,000 with the major shareholders as joint obligors. As of December 31, 2023, the total amount drawn was $18,391,571 (U.S. $1,088,677). On January 26, 2024, February 26, 2024, March 26, 2024, April 26,
2024 and May 26, 2024, the Group drew U.S.$70,000, U.S.$316,000, U.S.$311,000, U.S.$325,000 and U.S.$374,000 respectively.
|
19
| (6) |
Sale and lease back agreement signed with Fínamo in February 2023 for an amount of $350,000,000 with a 48-month termination period. The agreement includes the pledge of plots of land as security in La
Punta Baja Mar that are subject to a registered debenture. The Group signed additional sale and lease back agreements for $60,000,000 in October and November 2023.
|
| (7) |
Loan for purchase and development of the beach club, which also guarantees this loan.
|
| (8) |
Loan with “Best rate” interest for preferred clients. On March 27, 2024, Murano World, S. A. de C. V. increased this credit line from U.S.$1,500,000 to U.S.$2,000,000.
|
| (9) |
Sale and lease back agreement signed with Exitus Capital in December 2019 with a 36-month termination period for each tranche.
|
| (10) |
Loan agreement for U.S.$972,300 signed on June 26, 2023.
|
| (11) |
On January 5, 2024, the Group signed a loan agreement with Fínamo for $350,000,000 at a fixed annual interest rate of 17%; funds were received on the same date. On January 5, 2024, the Company also signed an additional loan agreement
with Fínamo for U.S.$26,000,000 at a fixed annual interest rate of 15%. The funds were received on January 18, 2024, and part of this loan was used to pay the $350,000,000 described above. Unit 3 of the land in Grand Island was given as a
guarantee under this loan agreement.
|
| (12) |
On April 9, 2024, Murano PV, S. A. de C.V. signed a loan agreement with Fínamo for $100,000,000 with maturity in 6 months and a fixed annual interest rate of 22%.
|
The loan agreements referred to above include covenants and restrictions that require, among other things, to provide quarterly and annually the
lenders with the companies’ internal financial statements and compliance with certain ratios. Noncompliance with such requirements constitutes an event of default under which the respective loan may become immediately due and payable.
As of June 30, 2024, the Group complied with all terms and covenants included in the loan agreements, except for the breaches
of Inmobiliaria Insurgentes I421 and Fideicomiso Murano 2000 loans described in note 2c.
As of December 31, 2023, the Group complied with all terms and covenants included in
the loan agreements, except for the following:
Inmobiliaria Insurgentes I421
As of December 31, 2023, the additional debt service reserve fund of the Bancomext loan was not fully funded,
and the Group requested a waiver from the lender in connection with the funding obligations of the debt service reserve funds. As described above on, April 4, 2024, the Group obtained an event of default waiver provided by Bancomext which waived
the breach, so the lender would not call the debt. The Group classified the outstanding balance of this loan as a current liability as of December 31, 2023 due to the waiver being obtained after year-end.
Fideicomiso Murano 2000 CIB/3001 (subsidiary of Murano World)
The Group anticipated that it might not have the debt service reserve account fully funded as of December 31,
2023, and requested a waiver from the lenders. Such waiver was received on December 29, 2023. Consequently, the breach was waived as of December 31, 2023.
| 8. |
Revenue
|
The Group’s operations and main revenue streams are as described in the last annual combined financial statements. The Group’s revenue is derived
from contracts with customers, which include the operation of hotels and the resultant income received from guests and related services, and revenue for administrative services with related parties.
20
|
For the six months ended June 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Revenue from contracts with customers
|
$
|
267,493,096
|
$
|
106,342,828
|
||||
|
Revenue for administrative services with related parties
|
-
|
1,002,959
|
||||||
|
Total revenue
|
$
|
267,493,096
|
$
|
107,345,787
|
||||
Disaggregation of revenue from contracts with customers
In the following table, revenue from contracts with customers is disaggregated by primary major products and service lines and timing of revenue
recognition.
|
For the six months ended June 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Major products/service lines
|
||||||||
|
Room rentals
|
$
|
135,948,761
|
$
|
53,279,599
|
||||
|
Food and beverage
|
54,217,047
|
45,487,437
|
||||||
|
All-inclusive
|
65,532,186
|
-
|
||||||
|
Other services
|
11,795,102
|
7,575,792
|
||||||
|
Total revenue from contracts with customers
|
267,493,096
|
106,342,828
|
||||||
|
Administrative services with related parties
|
-
|
1,002,959
|
||||||
|
Total revenue
|
267,493,096
|
107,345,787
|
||||||
|
Timing of revenue recognition
|
||||||||
|
Services and products transferred at a point in time
|
66,012,149
|
54,066,188
|
||||||
|
Services transferred over time
|
201,480,947
|
53,279,599
|
||||||
|
Total revenue from contracts with customers
|
$
|
267,493,096
|
$
|
107,345,787
|
||||
| 9. |
Other income
|
|
For the six months ended June 30,
|
||||||||
|
2024
|
2023
|
|||||||
|
Other income
|
||||||||
|
Expense reimbursement
|
$
|
4,376,288
|
$
|
8,533,101
|
||||
|
VAT revaluation
|
2,324,724
|
799,605
|
||||||
|
Amortization of key money
|
568,690
|
-
|
||||||
|
Other income
|
7,347,690
|
17,860
|
||||||
|
Total other income
|
$
|
14,617,392
|
$
|
9,350,566
|
||||
| 10. |
Income tax
|
Income tax expense is recognized at an amount determined by multiplying the profit before income taxes for the interim reporting period by
management’s best estimate of the weighted-average annual income tax rate expected for the full financial year, adjusted for the tax effect of certain items recognized in full in the interim period. As such, the effective tax rate in the interim
financial statements may differ from management’s estimate of the effective tax rate for the annual financial statements.
The Group’s consolidated effective tax rate for the six months ended June 30, 2024 and 2023 was (0.1)% and 7.1%, respectively. The change in
effective tax rate was caused mainly by the following factors:
| • |
The temporary differences that arise from the balances of the property, CIP and equipment and the right-of-use assets and the lease liabilities items.
|
21
| 11. |
Stockholders’ Equity
|
| a. |
Common stock at par value as of June 30, 2024 is as follows:
|
|
Number of shares
|
Amount
|
|||||||
|
Fixed capital:
|
||||||||
|
Series A
|
50,000
|
$
|
50,000
|
|||||
|
Variable capital:
|
||||||||
|
Series B
|
900,002,000
|
900,002,000
|
||||||
|
Total
|
900,052,000
|
$
|
900,052,000
|
|||||
| 12. |
Commitments and contingencies
|
| 1. |
In March 2024, in connection with the aforementioned Business Combination Agreement, the shareholders transferred 1,250,000 shares to certain vendors of Murano World as advance consideration for future construction and marketing
services. Since these services have not yet been received, no increase in assets nor equity has been recognized as of the date of these condensed consolidated and combined interim financial statements.
|
| 2. |
In accordance with Mexican Tax Law, companies carrying out transactions with related parties are subject to certain requirements as to the determination of prices, which should be similar to those that would be used in arm´s-length
transactions. Should the tax authorities examine the transactions and reject the related-party prices, they could assess additional taxes plus the related inflation adjustment and interest, in addition to penalties of up to 100% of the
omitted taxes.
|
The Group, like its assets, are not subject to any legal contingency other than those of a routine nature and characteristic of the business. From
transactions with related parties, tax differences could arise if the tax authority, when reviewing said operations, considers that the process and amounts used by the Group are not comparable to those used with or between independent parties in
comparable operations.
| 13. |
Subsequent events
|
On July 30, 2024 Operadora Hotelera GI, S. A. de C. V. signed a 60-month lease agreement with Arrendadora Coppel, S.A.P.I. de C. V. for total rent
payments of $40,226,116 plus 16% of VAT.
On August 27, 2024, Nafin issued a commitment letter in favor of Murano PV, for a financing facility of up to U.S.$80 million. This commitment is
intended to assist Murano PV with its working capital needs and compliance with its financial obligations, subject to the repayment in full of the GIC I Loan and other customary conditions precedent. We believe that Nafin's commitment letter
reinforces our liquidity and short-term financial stability, in furtherance of the fulfilment of our business strategy.
| 14. |
Correction of immaterial errors
|
The condensed combined interim financial statements previously issued for the period ended June 30, 2023 and for the six-months
period then ended, included errors related to the classification of non-cash transactions in the combined statement of cash flows and the depreciation of the period. Management believes these are immaterial errors to its condensed combined
interim financial statements taken as a whole.
| • |
The cash flow adjustments include the following: (i) a decrease of interest expense in operating activities and a decrease in the interest paid in financing activities of $160,654,045 for the period ended June 30, 2023.
|
| • |
The depreciation expense adjustment as of and for the period ended June 30, 2023 include the following: (i) an increase in the depreciation expense of $48,874,784 and (ii) a decrease in the net profit of the period of $48,874,784.
|
* * * * * *
22