Not in talks with Delta Corp for stake sale: Advani Hotels

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Not in talks with Delta Corp for stake sale: Advani Hotels

In an interview with CNBC-TV18, Sunder Advani, CMD, Advani Hotels, spoke about the latest happenings in his company and sector.

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In an interview with CNBC-TV18, Sunder Advani, CMD, Advani Hotels , spoke about the latest happenings in his company and sector.

Below is a verbatim transcript of his interview with CNBC-TV18's Reema Tendulkar and Gautam Broker. Also watch the accompanying video.

Q: We are entering a festive season, there is Commonwealth Games, to capitalise on all this are you looking to hike your room rents any time soon, maybe in October?

A: I did have a plan to increase the room rates from October, not very much, but there will be some increase. Primarily because of the Commonwealth Games, we expect some of those people who are coming to Delhi to be able to take a trip to Goa as part of their trip to India.

The mix of the clients in our hotel would change because we have had primarily chartered clients during the six months, October to April, they pay less compared to the free independent traveler (FIT) market. So, as we expect more FITS this year into Goa because of the Commonwealth Games, so our average rate will go up as a result of this.

Q: What are your current occupancy rates and by how much do you expect them to go up in the coming quarter?

A: The occupancy to date for the six months is about 63% for the hotel. We do expect that these six months will also be better than last year because last year the UK market was very depressed because they were having their own problems with their own economy. So, the Russian market is the only real key and we expect a huge boom in that market this year compared to last year. So, I expect that the average rate for the next six months as a result of that Russian market will be substantially higher for the whole hotel.

Q: You sound quite optimistic over the next few months, how would that improve your margins, where do you hope that would stabilise at?

A: Last year, we had a gross operating profit (GOP) of 20.5%. That was on a sale of about Rs 31.77 crore. For this financial year, we are expecting that margin to go up to about 23%.

Q: Our team has some information that Delta Corp , a company that owns about 35% stake in your company, may be looking to ramp up their stake. Now, the promoters currently hold about 49% in Advani Hotels. We were looking to understand whether you have heard of any plans from Delta Corp, if they are willing to hike their stake or you are in negotiations with them for any kind of a stake sale?

A: The information is slightly incorrect. The promoters do own over 50% of the company. There have been no negotiations about the sale of any of our shares to Delta Corp. I don't know what their plans are about increasing their stake, that's something that I can't answer for.

Q: But with a company like Delta Corp holding about 35% stake in your company, does that make you feel uncomfortable or do you think there could be a possibility of a hostile takeover kind of a situation? Even though you have a 51% stake so that's not possible but do you think that can be likely, they might try to do something like that?

A: I can't comment on something that somebody else may do, that will not be right for me to do so. We can only talk about ourselves and we are not selling any of our stakes that's for sure and we hold the majority.