Mohit Rathod – Mumbai
The Indian Hotels Company (IHCL) revealed the company’s plan reduce its financial exposure across properties by engaging in more management and operations contracts instead of ownership.
Moving in that direction, the board of directors has accorded its approval to allow United Overseas Holding (UOH), a wholly owned subsidiary of IHCL, to pursue divestment of Taj Boston through sale/ disposal of the LLC interests in IHMS Boston LLC, at a consideration not lower than US$ 125 million. However, IHCL will retain brand presence on the property through management agreement. The company intends to complete this divestment in the current financial year.
Rakesh Sarna, managing director and CEO, IHCL, said, “We will be divesting certain assets; and using proceeds from those divestments, we will not only reduce our financial exposure, but also fuel growth. Our growth agenda remains intact. Our top market to develop is India. We feel that Mumbai, Delhi, Goa, Bengaluru, Chennai and Hyderebad are key markets for quality earnings. Alongside, we are also considering the Kerala circuit and the North East region.”
“Outside India, our area of focus remains the Gulf Cooperation Council (GCC) nations. We have been successful in securing deals in Dubai. We will be introducing more hotels in Dubai in the next 3.5 years,” he added.
Apart from the GCC countries, IHCL is also looking at Thailand, Singapore, Vietnam and Combodia, but will be taking cautious steps in investments. “Markets like Singapore, Tokyo and Seoul require intensive investments, and our interntional expansion plan doesn’t include any financial exposure and undue risks. We will grow the company, but we will not expose it to risks,” informed Sarna.
Anil Goel, executive director – finance, IHCL, commented, “Our desire is not to increase debt, whilst we continue to grow our business. We want to bring our balance sheet back to the level we are comfortable with.”
During 2016-17, the company will open its fifth lodge under Taj Safari, in Chitwan, Nepal; a Taj Exotica in Andaman; a Vivanta by Taj hotel in Amritsar; two hotels under Gateway brand and four under Ginger brand.
