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Thursday, Oct 02, 2003

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Indian Hotels to make fresh foray into US

Our Bureau

Mumbai , Oct. 1

THE Indian Hotels Company Ltd (IHCL) is attempting afresh an entry into the US market. Its board today "considered and approved the making of a non-binding bid by the company, or through any of its subsidiaries and/or associate companies for the acquisition of a hotel property in the US, subject to a due diligence process," an official statement to the BSE said.

More details will be furnished "if our bid is successful". IHCL's spokesperson confirmed interest in a US property, but declined to reveal more including location and whether the target was a standalone hotel or a small chain. Likely overseas growth was cited in expansion plans outlined by IHCL at meetings few months back to disclose FY03 and first quarter FY04 results.

It intended to raise Rs 75-100 crore as borrowings during the second quarter, the route or market albeit not finalised when reported in July. IHCL, with debt of approximately Rs 600 crore, said the new funds would go to augment its capital expenditure. There is talk in banking circles of the company having raised some money. However, IHCL is into an asset-light mode and the theme is sought to be extended to overseas acquisitions as well.

In June, Mr R.K. Krishna Kumar, Vice-Chairman, IHCL, said the company had lined up equity partners and acquisition models like that used by Tata Tea for Tetley were candidates for use.

"Our view is that we should not hold majority equity stake. We can do with sliver equity, but we should manage the property," he said. Speaking to Business Line in July, Mr Raymond Bickson, Managing Director, IHCL, said, "A few years ago, we were actively pursuing `The Carlyle' in New York. Since then, we have looked at different opportunities to expand, either through acquisition of a cluster of hotels or individual properties, which strategically fit our portfolio. Taking an equity stake in properties would depend on the country, the location and the opportunities and comfort level of the group. Being part of Tata, hotel expansion would mean high-profile publicity for the Tata brand overseas."

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