The Hindu Business Line : EIH board clears restructuring plan

THE board of EIH Ltd, at its meeting in Mumbai on Monday, has cleared, subject to further review, a "composite restructuring" of the company through the merger/de-merger of EIH Ltd and EIH Associated Hotels Ltd.

The process is expected to involve the transfer of two of its hotels, Oberoi Cecil, Shimla and the Trident Hilton, Bhubaneshwar. Valuers, advisors and consultants to work out the exchange ratio and carry the process forward have already been appointed.

Talking to Business Line here on Monday, Mr S. S. Mukherji, Vice-Chairman & Managing Director of EIH Ltd, said the board will meet again on January 30 to finalise the restructuring plan, under which all Trident Hotels are expected to come under the Chennai-based EIH Associated.

He, however, clarified that this did not mean that any of the Oberoi Hotels would not come under EIH Associated. Oberoi Rajvilas and Trident Chennai are now under EIH Associated Hotels.

Post-restructuring, EIH Associated would become an eight-hotel company, from the existing two-hotel outfit, commanding as many as 850 rooms, Mr Mukherji added. EIH Associated now has 230 rooms.

He clarified that such mergers/demergers in the hospitality sector result in substantial cost advantages, given the cyclical nature of the business.

Mr Mukherjee said the merger scheme is being drawn up, and the legal-advisory and consultancy work has been entrusted to Lazard India, Bansi Mehta and Khaitan & Co.

EIH Associated would be the merged entity, subject to necessary approvals, including that of the respective shareholders.