News: Tatas plan to merge group hotels

(TT 10/10/2006) Mumbai - The Tatas-promoted Indian Hotels Company Ltd (IHCL) is looking at merging certain companies of the Taj Group with itself.

In a statement to the bourses today the company said it is looking at a proposed merger of Taj Group companies, namely Indian Resorts Hotels Ltd, Taj Lands End Ltd, Asia Pacific Hotels Ltd, Kuteeram Resorts Ltd, Gateway Hotels & Gateway Resorts Ltd, with itself. “A meeting of the board of directors of the company will be held on October 12, 2006 for the same,” the company said in its statement.

According to reports, the Tatas had increased their holding in Indian Resort Hotels to 52 per cent from 45.04 per cent through a buyback offer some months back. The group had invested Rs 3.96 crore to buy back 5.66 lakh shares at Rs 70 a share. In Indian Resort Hotels, the Tatas hold their stake through Tata Sons, Ewart Investments, Tata Investment Corporation, Tata Industries, Bambino Investment & Trading Company, The Indian Hotels Company and Taj Holdings. Indian Resort Hotels owns the Fort Aguada beach resort in Goa.

Prior to the buyback, financial institutions and insurance companies together held 20.91 per cent in the company. However, their holdings reduced, following the buyback, to 13.97 per cent.

At present, non-resident shareholders hold 0.05 per cent, foreign institutional investors 0.26 per cent and the balance is held by the public.

This exercise was part of the Taj Group’s restructuring to bring down the number of group hotel companies to around 28 from 54 over the next two years. In the first phase, the group intends to lower the number of hotels to 38 and during the second phase, the number would finally come down to 28.