The Hindu Business Line : Sterling plans investing Rs 400 cr for expansion

Mumbai June 1 Sterling Holiday Resorts (India) Ltd, a Chennai-based company listed on the BSE, said it would look for a turnaround in terms of its presence in the hospitality industry in the next two years.

The company plans to invest Rs 400 crore towards expansion in the next one-and-a-half years, which would be partially funded through sale of timeshares and the rest through term loans, venture capitalist route or individual investments. The company would decide about the same by June-end, said Mr R. Subramanian, Chairman and Managing Director of Sterling Resorts.

The company suffered losses ranging between Rs 3-4 crore every month between 1996 and 2004. Its total liabilities touched Rs 207 crore by 2004.

"With stock market crisis, and crash of real estate with low sale of timeshares, the company started incurring losses and could not service its debts to the banks, could not maintain the resorts properly and was unable to complete the pending projects," said Mr Subramanian.

Lands sale

However, the company claims to have got its act together through sale of surplus land in Chennai and Goa for Rs 100 crore, sale of timeshares and minor profits through operation of its existing 1,200 rooms.

"All but Rs 30 crore of the debt remains to be cleared, which would be over in the next three months; refurbishing of our resorts and other pending projects will also be complete by December. In addition, we will be able to break even and make an estimated profit of Rs 1.5 crore in June 2007 and by July touch Rs 3.5 crore," he said.

The expansion plans include sale of timeshares worth Rs 200 crore in the next one year, setting up of 1,000 apartment hotels of three-star category in 20 cities, setting up of minimum of 10 rooms under three-star category in around 40 pilgrim centres in India and 10 rooms each of similar status in 17 international locations.

Sterling Resorts has assets worth Rs 450 crore with properties in Lonavala, Mahabaleshwar, Shirdi, Goa (plans to build one more), Gangtok, Chel, Corbett National Park, Yelagiri, Tehri, Munnar, Yercaud, Puri, Darjeeling and others.

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