Indian Hotels buys stake in Orient-Express
Our Corporate Bureau
18 September 2007
The Mumbai-based Indian Hotels Company, better known for its Taj group of hotels, has bought a 10 per cent stake in Orient-Express Hotels Ltd. for $211 million (about Rs850 crore). The acquisition is being done through IHC''s wholly owned subsidiary Samsara Properties Ltd.
Bermuda-based Orient-Express owns or part-owns and manages 49 businesses operating in 25 countries. These include:
- 39
hotels on five continents, including Hotel Cipriani in Venice, the Mount Nelson
in Cape Town, the Copacabana Palace in Rio de Janeiro and the Observatory in Sydney;
- Two
restaurants; ''21'' Club in New York and La Cabaña in Buenos Aires;
- Six
tourist trains, include the legendary Venice Simplon-Orient-Express in Europe,
The Eastern & Oriental Express in South East Asia and The Royal Scotsman;
and (part-owns and manages) PeruRail in Peru.
- Luxury cruises in Burma and France.
Purchase
of the Orient-Express stake is said to be a part of a $1.5-billion thrust by the
Tata Group-owned Indian Hotels to expand globally. Earlier this year the Indian
company completed its takeover of Ritz-Carlton hotel in Boston for $170 million.
Indian Hotels, India''s biggest hotel chain, is looking at Orient-Express as
a partner in this expansion drive. It is in continuing discussions with Orient-Express
for building the alliance, and may further increase its stake in that company.
Earlier in September the group''s Taj Hotels Resorts and Palaces and Okura Hotels & Resorts, a major international hotel group in Japan, signed a strategic joint marketing agreement to develop cross-promotional opportunities for both companies to harness each other''s strengths in their respective markets of dominance.
This is part of Indian Hotels'' strategy to strike alliances with leading hotel groups that do not have a presence in India but have a presence in other countries.
Indian Hotels has plans to borrow up to Rs.4,000 crore and raise over Rs.1,900 crore through a rights issue. These funds will be used to fund expansion and acquisition of properties. Revenues from global operations are projected to rise to a third from the current level of 20 per cent.
