Asian Hotels may be split into three independent business units

Mumbai: The board of directors of Asian Hotels, which owns the Hyatt Regency properties in Mumbai, New Delhi and Kolkata, is proposing restructuring the company into three independent undertakings.

The restructuring has become necessary as the three promoter groups have, since starting the hotel project, acquired "independent" interests in the hospitality industry.

After the restructuring, one unit will own the Delhi property, while the second one will control the Kolkata property together with the investments and development options in Bhubaneswar, appropriate cash liquidity, besides Regency Convention Centre and Hotels Ltd.

The third unit will own the Mumbai unit together with investments and developments options in Bangalore.

The draft scheme being put up to the shareholders for their approval envisages the following: appropriation of a portion of general reserves to increase the paid-up capital by Rs11.40 crore; post enhanced paid-up capital, shareholders to get one share in each of the three undertakings to be formed as part of the restructuring; Yans Enterprises, a promoter, to subscribe to fully convertible preference shares of the total value of Rs311 crore on a preferential basis; and an independent private equity investor to subscribe to similar instruments to the tune of Rs30 crore.

The board is also proposing that the shareholders approve the issue of redeemable non-convertible preference shares to one of the promoters and IDFC to the tune of Rs90 crore each. These shares will be redeemed in three annual instalments at a premium of Rs16.90 crore.