29520 - City Express II

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Summary of Proposed Investment

Project Number

29520

Company Name

HOTELES CITY EXPRESS S.A.B. DE C.V.

Date SPI Disclosed

May 6, 2010

Country

Mexico

Industry

Tourism, Retail and Property

Projected Board Date

Jun 18, 2010

Status

Completed

Sector

City and Business Hotel

Department

Gbl Ind, Manufact, Agribus & Services

Environmental Category

B - Limited

Previous Events

Approved : Jun 25, 2010
Signed : Jun 29, 2010
Invested : Sep 29, 2010

Project Description

Through its subsidiaries, Hoteles City Express, S.A.P.I. de C.V. (“City Express” or “the Company”) is engaged in the development and operation of business hotels for the middle and middle low income markets in Mexico. It has successfully engaged in the implementation of 47 hotels in 24 of the 31 states of Mexico. The project consists of the development of new hotels (the “Project”), which would help the Company to consolidate its leading position in the budget business hotel sector, accelerate existing growth plans and initiate its expansion outside of Mexico.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan
Equity	20.0

Development Impact

The proposed project will have the following development impact: (i) increase in supply of competitive price-quality business hotels with consistent international quality and safety standards; (ii) creation of new employment both directly at the hotels and indirectly along the supply chain, temporary employment will also be provided to local labor during the construction phase; and (iii) the Project will generate supply linkages for local vendors serving the needs of both the hotel and its guests and will contribute to the development of the local economy.

IFC’s additionality in the proposed investment will be as follows: (i) industry and regional knowledge and expertise: City Express will benefit from IFC's experience and knowledge in emerging markets, particularly in its proposed expansion plans to other countries within Latin America; (ii) sponsor investor: in addition to the provision of long-term equity financing, IFC’s participation will strengthen the potential exit strategy; (iii) regional expansion: IFC’s involvement as a long term partner will promote the replication of the project in other geographies, particularly in emerging economies; (iv) environmental and social standards: IFC will provide guidance to the Company to implement international standards in its environmental and social practices.

This is a category B project according to IFC’s Procedure for Environmental and Social Review of Projects because has limited social and environmental impacts that may be mitigated by adhering to generally recognized performance standards, guidelines or design criteria.

Key environmental and social issues associated with this project are corporate environmental and social management capacity; permitting and licensing of new sites; management of environmental impacts and occupational health and safety during construction; labor and working conditions; use of energy, water and resources; structural considerations in the design of the hotels; life and fire safety; solid waste management and; land acquisition.

Contacts

For Inquiries About the Project, Contact

Robertos Palacios, Chief Financial Officer Santiago Parra, Corporate Finance Director Hoteles City Express, S.A.P.I. de C.V. Montes Urales 715-2o piso Col. Lomas de Chapultepec Mexico DF 11000 Telephone: +52 55 5249 8050 Fax Number +52 55 5249 8098 Website: www.hotelescity.com

For Inquiries and Comments About IFC, Contact

General IFC Inquiries IFC Corporate Relations 2121 Pennsylvania Avenue, NW Washington DC 20433 Telephone: 202-473-3800 Fax: 202-974-4384E Mail: Webmaster

Local Access of Project Documentation

Information is available in the Company’s website: www.hotelescity.com, selected City Express hotels across México and in the main offices of the Company. City Express will make adequate public disclosure of this transaction in the Mexican business and trade press.

This Summary of Proposed Investment is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. It is not an offer of shares to the public and is intended solely to enhance the transparency of IFC’s activities. This document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC’s Policy on Disclosure of Information that went into effect April 30, 2006.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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