Claridges mulls IPO to finance new hotels
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- Published 29.10.06
New Delhi, Oct. 29: Suresh Nanda’s Claridges Hotels and Resorts (CHR) has drawn up ambitious expansion plans and intends to float an IPO to raise Rs 1,000-1,200 crore to finance its new five star hotels across the country. Nanda himself, however, has fallen foul with the CBI over an Israeli missile deal.
The issue will be floated in the next two to three years to raise funds for constructing five star hotels in Goa, Hyderabad, Bangalore, Pune, Chennai and Rajasthan.
“We need about Rs 1,000-1,200 crore to finance our new projects. It should take us seven to eight years to have hotels in all these regions. We are at an advanced stage of negotiations to finalise land for Goa and Hyderabad,” Suresh Nanda’s son Sanjeev Nanda, managing director of CHR, told The Telegraph.
The company has decided to raise funds even as Suresh Nanda finds himself in the dock after the CBI allegation that he bribed Samata Party functionaries to get George Fernandes sign the controversial Barak deal with Israel and pocketed a hefty commission from the Israeli company.
CBI has named Suresh in the first information report in the Barak case. It was alleged that Nanda paid Rs 2 crore to Jaya Jaitly at Fernandes’s house to get his signature on a contract for seven Barak anti-missile systems.
The FIR also alleged that Suresh Nanda bribed Samata Party treasurer R.K. Jain to influence the then defence minister.
A financial analyst said, “If Nanda does not get a clean chit in the Barak deal, he will have to make this disclosure while filing the prospectus for the IPO with market regulator Sebi. It is generally observed that companies with scam-tainted history do face trouble during the placing of pre-IPO allotments with financial institutions, which are the major buyers.”
The disclosure in the IPO prospectus could also deter retail investors who would be wary of purchasing shares of such companies.
The Claridges, which has a hotel in Delhi, is all set to open a five-star on the Delhi-Faridabad border by next year. Earlier this year, the group bought two properties — a three star called ‘Hill View’ and a half constructed five star hotel in an all-cash deal for Rs 74 crore.