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Sterling Holiday Resorts plans to raise Rs 120 crore through QIP or FCCB or a mix of both in the next 18 months to complete its ongoing projects and the proposed expansion, which will double the room inventory from 1,200 now.
The promoters hold close to 15 per cent and “our family is open to diluting its stake further,” according to Mr S. Sidharth Shankar, Joint Managing Director, Sterling Holidays.
It recently obtained line of credit from IL&FS for Rs 40 crore, he told Business Line .
Sterling Holiday Resorts is in the midst of doing-up its resorts. It has 14 resorts in 12 holiday destinations across the country with over 1,200 rooms and cottages.
The plan is to refurbish “at least 250 of them in the first phase” so as to get them up and running before the vacation season. The rest before the end of this year, said Mr Siddharth Mehta, Vice-Chairman, Sterling Holidays and Founder of Bay Capital. Bay Capital bought 24 per cent in Sterling, paying Rs 50 crore, in 2009.
Time shares
It currently has over one lakh timeshare owners. However, only a half of them are active by paying the annual maintenance and amenities charges, and “our endeavour is to first bring back the other half too”. It recently sent out a newsletter to its members inviting them to visit the resorts again. In a bid to woo them back, the company has renovated restaurants and also doubled the staff (to over 1,600) to improve its services.
To a question whether the company, at one point in time, oversold time shares, Mr Shankar said, that back in the mid 1990s the company had seven different projects in various stages of completion by then. If those projects were completed as planned, it would have been perfectly fine.
The company became almost debt-free in 2009-10 after settling them by liquidating its non-core assets and with the fund infused by Bay Capital. Sterling Holiday today closed on the BSE at Rs 71.60 a share. This translates to a market cap of Rs 350 crore, but Mr Shankar said that on the basis of its assets it is worth Rs 500 crore.
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