Indian Hotels Co. Ltd., Mumbai, is looking to sell some assets to further pare debt and move toward more of a fee-based management business, CEO Puneet Chhatwal told Bloomberg in a recent interview. IHCL aims to reduce ownership to 50% by 2022, from 70% at present, Chhatwal said.
The sale and lease-back plans include as many as six hotels at the group’s Ginger budget brand and a similar number held by joint ventures and associate companies, he said, adding that the group has no plans to sell legacy and flagship properties.
The chain, which operates New York’s The Pierre and St. James Court in the UK, has been reducing debt in the past few years by selling assets including apartments purchased for Tata Group’s executives. Consolidated net debt stood at ₹2,000 crore ($282 million) at the end of March, down from as high as ₹3,100 crore two years earlier, according to the hospitality firm.
Indian Hotels is focusing on an “asset light model” besides keeping costs under check and shedding non-core assets, Amit Agarwal, analyst at Nirmal Bang Securities Pvt. said over phone. All 12 brokerages, whose data Bloomberg compiles for this firm, have a buy rating on the stock.
The efforts to pare borrowings at the hotel chain are also part of a wider drive at India’s biggest conglomerate. Tata Motors Ltd, the owner of Jaguar Land Rover, has said it is looking at options for the struggling British luxury brands. Tata Steel Ltdis in the midst of a revamp of its European operations.
Indian Hotels, currently operates 151 hotels, including the Taj Mahal Palace that became the target of terrorists during the Mumbai siege in 2008.
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