EIH lines up Rs 1000-crore investment over three years

Our Corporate Bureau

Kolkata, Aug 21: EIH Ltd, the owner of the Oberoi Hotels & Resorts chain, has lined up investments of Rs 1000 crore in various domestic and international projects, according to vice-chairman and managing director PRS Oberoi.

The group is going ahead with plans to set up with a deluxe hotel in Marrakech with Morocco-based ONA Group. This is in addition to another similar joint-venture hotel project being planned with the same partner in Casablanca, which is part of the second-phase of expansions planned by the group.

“We shall be able to start construction in 14 months,” Mr Oberoi told reporters after the 51st annual general meeting here.
According to him, the total investment will be $35 million, of which $14 million will be in equity and $21 million debt. The EIH Group and its associates will hold a 65 per cent stake and the ONA Group the rest.

EIH will hold only 40 per cent directly — for 25 per cent, it is talking to a number of potential overseas parties.

Mr Oberoi said the hotel will be designed by the architects behind the twin Emirate Towers in Dubai. This firm will be assisted by another local firm.

Back home, EIH has put on hold its plans for setting up hotels in Jaisalmer and Khajuraho. Mr Oberoi reasoned that unless both Jaisalmer and Khajuraho are linked by air, the projects are unlikely to kick off. However, the company has urged Jet Airways to link both these places of tourist interest by air.

In response to queries from equity shareholders, Mr Oberoi said that the group’s market share is better and in most of the cities, earnings of the group were higher compared with that of its competitors though room occupancy might be lower. EIH reported a turnover of Rs 518.94 crore inclusive of a Rs 41.87 crore other income for the year to March 31, 2001, against a turnover of Rs 466.32 crore which included a Rs 45.23 crore other income during the previous fiscal. It reported a net profit of Rs 94.82 crore for the latest year, against Rs 72.47 crore in the previous year.

Promoters up stake by 5.35% via creeping acquisitions

Our Corporate Bureau

Kolkata, Aug 21: THE Oberois, promoters of EIH Ltd, have increased their holding by 5.35 per cent, taking their aggregate equity holding to 44.50 per cent. The company has opted to take the creeping acquisition route, which limits acquisition of its own shares to five per cent annually. At the annual general meeting on Tuesday, minority shareholders were critical of ITC Ltd, a rival in the hotels business, for picking up a stake in EIH via investment companies. They were referring specifically to an August 20 report in The Financial Express that three investment companies — Megatop Financial Services & Leasing Ltd, New Deal Financial & Investment Ltd and Peninsular Investment Ltd — with the tacit support of ITC Ltd had picked up around nine per cent stake in EIH.

“We are not worried,” announced the 73-year old vice-chairman and managing director PRS Oberoi, son of the promoter, the 103-year old Rai Bahadur MS Oberoi. According to EIH Ltd’s balancesheet, the promoter group holds a 39.15 per cent stake in the share capital of Rs 152.39 crore, of which Rs 52.39 crore is equity and the rest cumulative redeemable preference shares. In line with the statement of the company’s counsel before the high court at Mumbai, the management did not place before the shareholders the controversial enabling resolution that would have allowed the management to raise funds through a preferential allotment at price to be determined by the management. All the other nine resolutions were passed unanimously.