Indian Hotels Company (IHCL) that owns the Taj, Vivanta, Gateway and Ginger brand of hotels across the country, has repaid $185 million (approximately Rs 840 crore) of debt raised to finance capital expenditure on new projects, renovations and investment in international subsidiaries.
The company has also restructured some of its rupee loans to optimise the interest outgo. IHCL’s interest outgo for the nine months ended December 2009 almost doubled to Rs 119.61 crore over the year-ago period.
“IHCL cleared the debt of $185 million with the help of Rs 750 crore proceeds earned from restructuring its shareholding in Sea Rock hotel project, as well as by raising fresh secured debt of Rs 300 crore from financial institutions in the fourth quarter of 2009-10,” an official in the know told Financial Chronicle. “The secured loans have been raised at a 9.5 per cent per year,” he added.
Responding to an emailed query by FC, IHCL said, “We are in the ‘silent period’ prior to results announcement. It is therefore not possible to respond to queries at present,” IHCL said.
IHCL repaid debt of $95 million (Rs 433 crore) housed in US properties controlled by International Hotel Management Services. This debt was raised to fund the renovation of its luxury hotel property, The Pierre, New York. IHCL through its subsidiary owns three luxury hotels in the US - The Pierre, on New York’s Fifth Avenue that reopened on June 1, 2009 following a $100 million renovation, the 110-room Taj Campton Place, San Francisco, and the 273-room Taj Boston hotel near the East coast of the USA.
Another $90 million was repaid by its wholly-owned subsidiary Samsara Properties, British Virgin Islands, which is the holding company for the Tatas’ 7.9 per cent stake in Orient Express Hotels (OEH). Samasara had raised $150 million from Standard Chartered Bank, Singapore, to acquire shares in OEH. The market value of this stake has fallen considerably due to a decline in OEH’s stock price.
This move will bring down its total debt to Rs 4,000 from Rs 4,100 crore. As of end-December 2009, the company’s total debt stood at Rs 4,600 crore.
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