Taj Group acquires Sea Rock Hotel for Rs680 crore

13 June 2009

Indian Hotels Company (IHCL) plans to take a controlling stake in closely-held Elel Hotels and Investments for Rs680 crore. Elel, a subsidiary of Delhi-based Claridges Hotels Private, holds the lease for the land on which Hotel Sea Rock stands in Mumbai.

IHCL, a Tata group company in a press statement issued Friday said it has an existing arrangement with Claridges (starting January 2009) for provision of technical and management expertise for the restoration and operations of Sea Rock hotel, on completion of redevelopment of the property.
 
IHCL will buy 85 per cent in ELEL under the deal for Rs 680 crore and will buy the entire shareholding at a later date

''It is now proposed to demolish the existing structure as site and redevelop the area as a high-end world class luxury hotel/convention centre with retail facilities,'' added the statement. IHCL already owns the Taj Lands End which stands opposite Sea Rock, across the road. The planned reconstruction would fully integrate Sea Rock with Lands End in a synchronised manner.

The hotel suffered severe damage in the 1993 Mumbai bomb blasts and was later acquired by Claridges in 2005. The Claridges group is owned by Suresh Nanda, Delhi-based industrialist.

Located in the western suburb of Bandra, Sea Rock was one of Mumbai's most prominent landmarks but could never reopen after the bomb blasts, largely because of disputes between its owners. The 400 room hotel had a better view being located closer to the sea than Land's End which has 368 rooms.

''We believe that considerable synergies can be generated by an association with the Sea Rock hotel, which when the reconstruction is completed will enable the combined operation to have a leading position in North Mumbai'' IHCL said in the statement. IHCL plans to fund the acquisition through Rs1,400 crore it raised last with a rights issue.