According to a report in The Times of India, Indian Hotels Company Ltd (IHCL), owner of Taj hotels, has sold a hotel project — an under-construction 180-room property in Coimbatore, Tamil Nadu — to its associate company Oriental Hotels. The rationale for the sale is to consolidate its properties in Tamil Nadu under one arm. IHCL, which made a profit on the transaction, holds around 34 per cent stake in Oriental Hotels, which has Taj Coromandel and Fisherman’s Cove under its fold.
Oriental Hotels has also got into budget hotels, although in a different way. The company has invested around Rs 50 crore in the form of cumulative convertible preference shares, which when converted would give Oriental Hotels an eight per cent stake in the five-year-old Roots Corporation that manages over 19 Ginger hotels. At present, Roots is a 100 per cent subsidiary of IHCL and is still to make money. The plan is to take Roots public in the future. |