The CEO of the Indian Hotels Company, Rakesh Sarna, is not mincing words.

Though India’s largest hospitality chain, the Tata Group controlled entity recorded its biggest ever loss of ₹554 crore in fiscal 2014, Sarna is sure that a turnaround is in the works given the restructuring exercise underway.

Outlining the measures that Indian Hotels Company Limited (IHCL), that runs Taj Hotels, has been deliberating over to turn profitable, Sarna reiterated, “We are at least two years away from a net profit.”

He added that the timeframe was dependant on several external circumstances, and that the macro environment could also impact progress.

The CEO was speaking to a select group of media persons in Mumbai, in his first interaction after taking over last October at the helm of the 112-year-old company.

At IHCL’s 113th annual general meeting (AGM) in August last year, Tata Group Chairman Cyrus Mistry had assured shareholders that the conglomerate’s flagship hospitality concern would return to the black over a two year time frame.

Debt major concern CEO Sarna has got his sights fixed on the same target, and is looking at enhancing the balance sheet, recharging operations and brand architecture, as well as shoring up the pipeline over the short term.

Though CEO Sarna outlined that the prime priority “at this point is to pare debt”, the hospitality chain would also be looking to sell its stake in Bermuda based Belmond, formerly called Orient-Express Hotels.

IHCL holds 7.13 million class-A shares of Belmond, which enables a 6.9 per cent stake. In November 2013, IHCL had announced it was backing away from its $1.6-billion bid to acquire Orient-Express Hotels.

Recently, Belmond announced a share repurchase programme that allows shareholders to exit the company. IHCL also has a voting right of 2.5 per cent, and is the second largest individual shareholder in Belmond.

As of March 31, IHCL has around ₹4,000 crore of debt on its books.

Terming the debt manageable, Sarna ruled out an infusion of fresh quity from the promoters. “We are not ready to go to the promoters for fresh equity. We need to create our own opportunities,” he said categorically.

India properties Stating that the firm was “committed to having a brand presence in the US, whether we have it as an owner, as a manager, or an associate”, Sarna said IHCL was focussed on shaving debt, and would also look to better manage its properties in India.

Sarna was referring to Delhi’s Taj Mansingh Hotel, as well as the 326-room hotel built where the former Sea Rock hotel stood, at Bandra in Mumbai. The hospitality chain has 16 properties outside India and 112 in the country.

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