No stake sale, can't stop ITC buying from open market: Oberoi

Oberoi Group Chairman PRS Oberoi today ruled out selling promoter stake in EIH Ltd, that owns the Oberoi hotels and resorts chain, but said he cannot stop ITC from buying shares in the open market.

Earlier this year, ITC Ltd had increased its stake to 14.98 per cent in EIH Ltd triggering speculation that the FMCG- to-hospitality conglomerate could go for an open offer once it crosses the 15 per cent mark.

"We have 46.4 per cent (in EIH Ltd) and there is no plan to sell any stake," Oberoi told reporters here.

Asked about ITC increasing stake in EIH through open market purchases, he said: "If somebody wants, we can't stop people buying from the stock market."

Oberoi said the hospitality chain is pressing ahead with its expansion plans under which it will see the group doubling room capacity to over 6,000 across the world in the next five years.

Two hotel properties will come up in Hyderabad within 18 months, he said, adding the total cost on the project is about Rs 650 crore. These are being developed with partner Jubilee Hotels and Oberoi group's share of investment will be around Rs 44 crore.

Besides, a brand new hotel is being built in Morocco with at a total cost of Rs 300 crore, out of which the group's investment is Rs 24 crore.

On the other projects, he said a property under the Trident brand is being developed at Dehradun in partnership with Max India Chairman Analjit Singh, while another resort hotel is also coming up at Chandigarh. The group's property at Gurgaon is likely to be operational by the end of this year or early next year.

Oberoi said in this fiscal the group will invest Rs 100 crore on renovation of properties.

Commenting on the impact of European economic crisis on Indian hospitality sector, he said this may affect arrivals from the continent.

"I am a little concerned," he said, adding many of customers of the Indian hospitality sector are from Europe.

The Oberoi Group operates 28 hotels and three cruisers in five countries under the luxury 'Oberoi' and five-star 'Trident' brands.