Weighed down by a debt pile of Rs 3,800 crore, Indian Hotels is looking to consolidate its overseas operations by exiting strategically unimportant geographies, reports CNBC-TV18's Farah Bookwala and Sajeet Manghat.
In the latest development, Indian Hotels (IHCL) has put its only property in Australia, called the Blue Sydney on the block.
In a statement to CNBC-TV18, an IHCL's spokesperson said: IHCL did receive an offer for the Sydney hotel, which IHCL examined but it did not materialize, and we have no further comment to add to the above. Normally, for every hotel company, both -- hotel solicitation, offers and queries -- are received on a regular basis and it is in our interest to evaluate all options and to ensure that it complies with our strategic intent."
Blue Sydney is a 100 room 5-star hotel in Sydney’s Wharf Area. It was purchased by IHCL in December 2005 from Starwood Group for AUS36 million dollars (then Rs 117 crore).
Blue Sydney's is a loss-making property. In FY13, the property made a net loss of net loss Rs 2.17 crore on a total income of Rs 55.79 crore.
IHCL has with 22 resorts worldwide, from the US to Mauritius.
IHCL reported a consolidated loss of 433 crore rupees in the quarter ended September 2013. The combined effect of Increasing costs, poor demand for hotel rooms, and previous expensive shopping sprees are hurting profitability.
At a press briefing on August 12 to discuss their second quarter results, Anil Goel, executive director for finance had told reporters that the company is working on a restructuring plan whereby it would spin off all its overseas assets into a subsidiary by March 2014.
IHCL had also written down the value of its long term overseas investments in Taj International Hotels Limited by 592 crore rupees during the year. Taj international Hotels, in turn, holds investments in various international entities, including Orient express.
Overseas investor concern also prompted Tata sons chairman to pull the plug on its USD 1.2 billion dollar bid to acquire US based international luxury chain Orient Express Hotels.
However, Indian Hotels continues to evaluate locations that may be of strategic importance, such as Amsterdam.
In its statement, the company said: "With reference to Amsterdam, IHCL was contacted for a recent non-equity hotel management contract and the opportunity to manage an iconic historic palace conversion. The hotel project was presented to IHCL which we are evaluating and at this stage it's only an expression of interest and have nothing further to report."
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