Hospitality major EIH Ltd, which operates the Oberoi and Trident brands of hotels, will utilise more than half of its rights issue of R1,178,86 crore to reduce debt.
?Majority of the proceeds from the rights issue, around R900 crore, will be used to retire debt and some part will be utilised for setting up flight kitchens,? said Oberoi Group chief planning officer and joint managing director Arjun Oberoi.
The group went through a percieved takeover battle, which blew over with Reliance Industries and Max Group chairman Analjit Singh coming in as white knights to keep in check ITC?s creeping acquisition of shares. But Oberoi said all the shareholders including Singh have subscribed to the rights issue and their shareholding pattern in EIH remains the same.
Regarding the succession plan, a press statement issued by the group says ?PRS Oberoi as chairman and CEO of EIH, leads the senior executive team and has no plan to retire or step down.?
At the press conference to announce the opening of its Gurgaon property, PRS ?Biki? Oberoi?s son Vikram and nephew Arjun were tight-lipped about the succession plan and maintained that both of them had their roles clearly defined.
Interestingly, though, Vikram Oberoi, when asked about the leadership of the group, said, ?The role of a leader in an organisation is to inspire and motivate, and to inspire somebody you don’t have to be the head of the organisation.? While Arjun Oberoi is the chief planning officer, Vikram Oberoi is the chief operating officer of EIH.
The Oberoi Gurgaon, with 202 rooms, is a management contract with Orbit Resorts, which owns the property. It has been built at a total cost of Rs 400 crore. The group will be adding four new properties in India and overseas by 2014. It is also looking at acquiring properties in Europe, where many discounted assets are available. ?We are looking at the Europe market for expansion and if the price is right, we might acquire a property,? said Arjun Oberoi.
Next year, the group will open a new hotel in Hyderabad with 320 rooms, followed by a 250-room property in Dubai. In 2013, the group will open another property in Hyderabad with 220 rooms. By 2014 it expects to start an 84-room property at Marrakesh in Morocco. It will also open a 70-room resort in Oman, but no time-frame has been fixed for that. The group is also setting up flight kitchens in Delhi and Mauritius.
In a bid to be asset-light, the group will be mainly looking at management contracts or a mix of equity and management for a few properties. Also, at present there is no intention of bringing in a budget or mid-market brand.
The Oberoi Group operates 32 hotels and resorts and cruisers under the Oberoi and Trident brands in India, Egypt Mauritius, Indonesia and Saudi Arabia. It also does flight catering.