Indian Hotels Company to restructure overseas investments

At the 114th annual general meeting of Indian Hotels Company Ltd., which owns the Taj Hotels Group, chairman Cyrus Mistry announced that the Tata-owned group will complete the restructuring of its overseas investments before the end of this fiscal year. 

According to the Times of India, IHCL is bringing its overseas investments, which have been divided into separate companies, under a single entity. The transfer of ownership will happen at arm's length, the story noted, and it will be based either on quoted value or fair value.

 

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IHCL has direct and indirect ownership in foreign units incorporated in Singapore, South Africa, UK, Netherlands and the U.S. The overseas companies manage over 10 hotels and restaurants besides having a stake in Belmond (formerly Orient-Express Hotels). 

Several of its foreign arms, the story notes, are in the red. IHMS, which operates the U.S. properties, reported a loss of Rs 177 crore in fiscal 2015, while Taj International (HK) incurred a loss of Rs 232 crore, and Samsara Properties, which holds stake in Belmond, posted a loss of Rs 290 crore. 

"We have a cross-functional task force to turn around the loss-making hotels," Mistry said, according to the Economic Times.

The company will consolidate the value of the offshore assets in IHOCO BV, its wholly owned Netherlands-based investment holding company that owns the St. James Court Hotel in London. According to its RoC filing in April, the company will sell its entire shareholding in International Hotels Management Services (IHMS) South Africa, TAL Lanka Hotels and TAL Hong Kong to IHOCO BV. 

The Times of India noted that IHCL has not clarified if it will create a new holding company for its overseas investments or convert one of its existing companies into the apex-holding company. 

Only a few weeks ago, Indian Hotels Company announced plans to open 15 new hotels and add nearly three times as many rooms to its portfolio. This will make the company the country's largest hotel chain, increasing total room numbers to 17,492 across 146 properties under Taj, Vivanta by Taj, Gateway and Ginger brands. The company owns the Taj Group of Hotels & Resorts.

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