Credit Suisse buys stake in Park Hotels

Apeejay Surrendra Park Hotels, owners of The Park Hotels, today announced that it had raised $55 million (Rs 220 crore) through a private equity deal with global financial giant Credit Suisse.

The deal is aimed at funding Park Hotel's major expansion plans. Apeejay Surrendra Group Chairman Karan Paul said, "I am delighted to announce this partnership between Apeejay Surrendra Park Hotels and Credit Suisse. Both partners share a deep understanding of the business and a vision for the future, which will propel the company to a new level." ICICI Securities was the advisor to Apeejay Surrendra Park Hotels.

The structured deal is expected to offer Credit Suisse anywhere between 10-15 per cent stake in the Kolkata-based hospitality company. This deal values the company at Rs 1,500-2,200 crore and puts it among the top-five hotel majors of the country.

Credit Suisse actively invests in real estate and hospitality-related projects in global emerging markets and regards India as one of the most important growth markets for its Asia-Pacific business.

The Apeejay group did not comment on its expansion plans or the valuation of Apeejay Surrendra Park Hotels. However, a 280-room hotel and retail complex is under construction in Hyderabad and would open in 2008-09. The Park has properties in Bangalore, Chennai, New Delhi, Kolkata, Navi Mumbai and Vishakhapatnam.

Priya Paul, chairperson, Apeejay Surrendra Park Hotels, said, "We have run a very successful hospitality business for over 40 years and our hotels are industry leaders in innovation and design. This infusion of capital will be a catalyst, enabling us to expand our footprint throughout the region.

The Apeejay group has been in the limelight since 2005, when it acquired the 100-year old iconic Typhoo brand along with London Fruit & Herb, Lift and other associated tea brands from Premier Foods for 80 million pounds. Last year, Societe Generale and the Burman family, which controls Dabur India, acquired a 75 per cent stake in Apeejay Finance.

The group has been running the The Park Hotels for over 35 years. The Park, Kolkata, is the oldest in the lot. It was opened in 1967 with 150 rooms. The Vizag property came into being the next year. It was the first deluxe hotel in Andhra Pradesh.

Then followed the others "" The Park, New Delhi, was launched in 1987 with 224 rooms, the Bangalore property was introduced with 109 rooms in 2000 and the Chennai hotel with 215 rooms in 2002. The Navi Mumbai property is the latest addition, which was launched in February 2007.

This is Credit Suisse's second investment in the real estate sector, the first was its acquisition of 75 per cent stake in a Rs 300-crore IT park-cum-five-star hotel project of the Pune-based developer, Vascon Engineers.

The Switzerland-based financial services company has ambitious plans for India, whose economy is growing at 9 per cent a year, with the real estate sector no exception.

Although it has not announced any numbers, it might invest in the booming real estate sector, said industry experts, adding that the foreign company might put in $1 billion in the next two years.