Oberoi denies receiving proposal from ITC
21 August 2009
According to EIH, it has not received any proposal from ITC on the latter's 14.98-per cent investment in the company. P R S Oberoi chairman of EIH said that the company could say what it would do only after receiving ITC's proposal which it has been reading about only in the papers. Oberoi was speaking to reporters after the company's 59th AGM on Thursday.
ITC, which owns the Welcomgroup of hotels, holds a 14.98-per cent stake in EIH through its subsidiary - Russell Credit. With its stake below 20 per cent, it triggers open offer for additional 20 per cent stake according to Sebi takeover regulations.
EIH has 46.42 per cent by way of promoters' shareholding.
EIH's hospitality business has taken a hit during the year under review and referring to that Oberoi said he was not expecting a recovery in the hospitality sector before the third quarter of FY11. He said that the Mumbai terror attacks and the financial downturn had taken a toll of the tourist arrivals into India which has significantly affected hotel occupancy and revenues. The recent H1N1 pandemic could also further restrict global travel, he added.
Room rates are currently down by 30 per cent from their last peaks, he said.
He said the remaining period of the current year would remain difficult for the hospitality industry though he was hopeful of a revival in 2010-11.
Oberoi said EIH proposed to invest Rs350 crore in new projects in the next two financial years and in the process add 2500 rooms to its current total of 4,022 rooms. He added that the company was also planning to manage more properties owned by others. He said that three such properties are under construction in Dubai, Abu Dhabi and Morocco.