Plans to de-merge hotel, international biz: BSEL Infra

BSEL Infrastructure Realty Ltd

Below is a verbatim transcript of an exclusive interview with Dharmendra Raichura on CNBC-TV18. Also watch the accompanying video.

Q: You have decided to de-merge your hotels and international business into separate entities. What is the eventual plan of these two divisions that is the hospitality and international operations? Are you looking to list these companies and when would that be? What revenues are left back with you post this merger?

A: The whole idea of de-merger is to unlock the value of the company and to give value to the share holders. The share holders of BSEL will get shares of BSEL international and BSEL hotels going forwards, BSEL international would be holding the projects in Malaysia and UAE which is around 10 million square feet under development. In future there would be a cash flows of around Rs 3,000 crore in the topline and around Rs 1500 crore on the bottomline for BSEL international. For BSEL hotels there would be a land back of about 40 acre in Gujarat as well as two existing hotel projects in Gujarat. This will be transferred to BSEL hotels. Going forward, there would be continuous cash flow for the BSEL hotels.

Q: So there are three companies?

A: Yes, all three we will be listing them in 2010 only.

Q: BSEL International has a lot of projects in UAE. What is the share of UAE projects?

A: Presently, BSEL Infra is holding 100% stake of BSEL UAE Company. In terms of revenue bifurcation, 60-65% of the company’s revenue is from BSEL international UAE.

Q: What kind of projects do you have in BSEL Hospitality? What all is expected to come on stream now?

A: Already two existing hotels running Gujarat presently and those two projects would be transferred to BSEL hotels as well as 40 acre of landbank will be transferred.