Indian Hotels Company (IHCL), the country’s biggest chain operator and owner of the Taj brand, said today that it would look at various methods of raising funds to meet its future expansion plans, including setting up hotel properties in India and abroad.
Speaking to shareholders at its 108th Annual General Meeting, Chairman Ratan N Tata stated, “We are seeing various forms of raising debt, as well as raising equity from the market.”
Tata, however, refused to elaborate. The amount raised will be used to fund IHCL’s target of setting up 45 hotels, which includes an addition of more than 7,200 rooms over the next four years. The expansion will be seen across all of its existing brands such as Taj, Gateway, Vivanta by Taj and Ginger. Tata also stated that the company will spend Rs 350 crore as capital expenditure in this financial year.
He also stated that although an average of 70-75 per cent occupancy is seen across all its properties in India currently, it will be difficult to predict at what capacity it would operate for the rest of the year, considering the current economic situation.
On the company’s investment in US-based luxury hotel chain company Orient Express, Tata reiterated, “Only time will serve the purpose of our involvement in that hotel. It is not an issue of our relationship, but it is about our common purpose and attitude. I hope we can come closer with time.”
The company had earlier expressed its desire to increase its stake in Orient Express from its current holding of 9.7 per cent. However, it has no plans to doing so through a hostile takeover.
The company has also expressed keen interest in acquiring some of Orient’s properties, which are based outside the United States and, which do not form a core of the US company.