SBI invests in Mayfair Hotels

05 January 2009

SBI has pickced up a nearly 20-per cent in Mayfair Hotels in Orrisa, for an undisclosed sum. The group currently has four hotels in the state and plans to use the funds to expand organically and geographically.

SBI acquired 3.7 million fresh shares of a face value of Rs10 each issued by the company. As a result, the subscribed equity base of the company has increased to 18.9 million from shares from 15.2 million earlier.

Aftetr the deal the promoters' stake will be reduced to 80 per cent. The group plans to dilute its stake upto 40-45 per cent fund its expansion in the east and north east.

Dilip Ray, chairman, Mayfair Hotels, says  that the east and the north east offer untapped potential.

Mayfair has a Rs260-crore expansion plan for which it may raise the remaining amount through an IPO in the next 24-36 months depending on market conditions.

It also plans to borrow Rs65-Rs70 crore from banks and financial institutions.