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| Lalit Suri Group to spend Rs 2,300 cr on new hotels |
| BS Reporter / Mumbai Nov 21, 2009, 01:03 IST |
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Delhi-based Bharat Hotels, the company owning The Lalit Suri Hospitality Group, will invest Rs 2,300 crore in setting up luxury and mid-market hotels across popular leisure and business locations in India and abroad.
The company will set up nine more premium hotels by 2012, in addition to the current tally of eight. The group will spend Rs 1,500 crore on these properties. Another seven will be built for the mid-market segment.
The group had an agreement with the Intercontinental Hotels Group (IHG), the world’s largest by number of rooms, signed in 1998. But decided not to renew it last year. Only the Mumbai and Goa properties are bearing the Intercontinental name, the contract for which expires in 2011.
Since last November, all its top-line hotels have ‘The Lalit’ brand name.
Jyotsna Suri, chairperson and managing director, said: “We are setting up a total of nine hotels and all of them will be operational by 2012. About 50 per cent of the funds earmarked for the luxury properties have been spent already. We have raised the amount through a mix of internal accruals, debt securities and external commercial borrowings.”
The nine new premium hotels will be in Kolkata, Jaipur, Chandigarh, Ahmedabad, Noida, Amritsar and Dehradun, besides two overseas properties in Dubai and Koh Samui (Thailand).
The company has also built a war chest of about Rs 750-800 crore for diversifying into the mid-market segment. It will build seven properties under this fold in Pune, Drass (Jammu and Kashmir), Jalandhar, Baroda, Mundra, Ahmedabad and Bangalore, the first of which will be operational by the end of 2010.
“The idea is to have a network of 25 hotels by 2014 under the mid-market segment. We will develop properties in Tier-I and Tier-II cities. We haven’t finalised on the branding of this segment yet,” added Suri.
While the land banks for the above cities have been secured, the company will identify the other locations in due course of time. All hotels will be built and run by the company and it does not intend to enter into any management contracts, according to senior executives.
It will also look at raising funds through the capital market route in 2012, with an initial public offering. However, the management declined to provide details on the capital the company is looking to raise.
Bharat Hotels, the formerly listed entity, was delisted from the bourses in 2003 after its promoters raised their stake in the company to over 95 per cent through open offers.
“We can dilute 10 per cent in the company, which if needed can be increased to 15 per cent. We expect to have 18 hotels operational by that time which would give us better valuations,” Suri further added.
Jyotsna Suri is the wife of hotelier Lalit Suri who passed away in London of a massive heart attack in October 2006.
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