Mumbai, Nov. 24: Indian Hotels Company is evaluating proposals to raise up to $75 million through overseas borrowings as part of its alternative long-term funding plans.
The company’s board has authorised a committee of directors to examine and evaluate alternative long-term fund raising proposals in the nature of a foreign debt instrument, linked, if necessary, to equity/warrants for an amount or up to $75 million, the Tata group company informed the Bombay Stock Exchange today.
The company has been scripting a plan to extend its reach across gateway cities in the US and select European countries and make a foray into China and South East Asia.
“The funds would be used to finance the various capital expenditure programmes of the company. Since the instrument has an equity option, it would minimise the impact on the debt:equity structure,” the company said.
Indian Hotels was silent on the reasons for raising funds. “This initiative is currently at the evaluation stage,” the company stated. Analysts, however, feel that it is getting ready for a big-ticket acquisition.
Indian Hotels has been repositioning itself as a premier hotel chain. Recently, the country’s largest hotels chain had appointed the US-based Landor Associates, the WPP group's pre-eminent branding and design consultancy firm. The firm will undertake a brand restructuring of the group.
The Taj group has 65 properties in the country and overseas, and has a presence in three segments of the hospitality sector — luxury, business and leisure.
The luxury division contributes the largest chunk of the group’s revenue, with business hotels will be its next big focus over the next three years.