Indian Hotels Company, which owns the Taj Group of hotels, has decided to sell Taj Boston at a base price which is not lower than $125 million (about ₹837 crore).

The board of the hotel chain has approved United Overseas Holdings (UOH), a wholly-owned subsidiary in the US, to pursue the sale and disposal of the property in Boston to an independent third party.

In a notice to the BSE, the company said, “The board has approved its wholly owned subsidiary United Overseas Holdings (UOH) plan to pursue the option of the Taj Boston hotel by way of sale/disposal of LLC interests in IHMS(Boston) LLC, a direct subsidiary of UOH”.

Indian Hotels had acquired Taj Boston hotel in 2006 with the purpose of having presence in the US.

However, global recession took its toll on the hospitality industry worldwide which impacted the profitability of the property.

Revenues and Ebidta margins for Taj Boston have been sliding with net loss before tax at $7.3 million in 2015-16.

“In recent times, the company has been seeking options for a course correction and focusing on growth in high margin markets, evaluating the relevance of its existing assets in the portfolio to reduce leverage,’’ the company added in the BSE filing.

Third party buyers for Taj Boston are expected to be real estate investment firms, real estate focused private equity firms who are interested in leveraging the ‘Taj’ brand.

Indian Hotels has also steadily been selling stake in luxury chain Belmond (formerly Orient Express Hotels) in the US to make an exit and incurring impairment costs.

It has also been exiting management contracts in places such as Dubai and Morocco, while it sold a property in Australia in 2014.

Narrows loss

Meanwhile, Indian Hotels has been reducing its losses over the past few quarters.

For the quarter ending March 2016, consolidated net loss stood at ₹37 crore against ₹347 crore in the previous quarter.

Shares of Indian Hotels dropped by 1.26 per cent and closed at ₹114 on Wednesday.

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