Indian Hotels to actively look out for properties

Our Corporate Bureau

Mumbai, Aug 31: Indian Hotels Company Ltd (IHCL) will continue to actively scout for high calibre properties to enhance its spread and breadth and even consider international borrowings, if worthwhile, company chairman Ratan Tata said at the 100th annual general meeting (AGM) of the company on Friday.

An enabling resolution increasing the authorised capital of IHCL to Rs 200 crore from the existing Rs 50 crore was passed unanimously, among others. The enabling resolution also encompasses the issue of capital for an amount not exceeding $75 million (approx Rs 356.25 crore) inclusive of premium at the relevant time of issue of securities.

Mr Tata said that IHCL has earmarked Rs 66 crore for renovation and capex for the current fiscal. This expenditure earmarked would also cover the construction of the 98-apartment Wellington Mews — a luxury serviced apartment in South Mumbai. The construction of Wellington Mews would be spread over a period of 18 months at a project cost of Rs 120 crore and would be ready for operations by 2003, he added.

During the previous year, the company had incurred an expenditure of Rs 34 crore on renovation along with Rs 58.34 crore on voluntary retirement scheme, for which it had raised an amount of Rs 150 crore through secured redeemable non-convertible debentures.

On PSU disinvestments, Mr Tata said the company will be looking at individual properties of ITDC and Hotel Corporation of India and the process of due diligence is currently on.

On the one-time settlement on the loans advanced to Taj Lanka Hotels Ltd by the banks, he said that it was set off for $18 million as against the total exposure of $37 million. The company did not incur any loss in the deal as it converted the fees into equity, Mr Tata added.

After reducing its subsidiaries by three last year, IHCL is to further dissolve two more inactive subsidiaries, viz Bombay Brasserie Ltd and SJCHL, company officials said.

‘Role for IHCL in A-I selloff’
On the disinvesment of Air-India (A-I), Mr Ratan Tata said that IHCL has a major role to play. He, however, stated that Singapore International Airlines (SIA) is distressed with the on-going controversies in Parliament but still continues to be in fray (with the Tatas) for acquiring a stake in A-I.

“Its a great deal of disillusion not only for SIA but also to other foreign companies investing in India,” he added.