5 Itdc Properties Sold For Rs 20.81 Crore

The government today decided to sell five India Tourism Development Corporation (ITDC) hotels for Rs 20.81 crore and give Ashok, Bangalore to the Lalit Suri-owned Bharat Hotels Ltd on a 30- year management lease. With this, the Centre has now managed to get Rs 267.22 crore from its disinvestment programme this fiscal.

The government will go in for rebidding in case of Delhi Ashok and Manali Ashok in the first fortnight of January, said disinvestment minister Arun Shourie.

The bids for five of the hotels slated for outright sale were higher than the reserve price.

The Delhi property found no takers for the 30-year management lease because of the outstanding tax issues, said Shourie. There were no bids for the Manali property. For the Bangalore property, the government received a bid offering Rs 4.11 crore as annual payment, part of which will be paid upfront.

 

"The government will get an upfront payment of Rs 39.41 crore, and the remaining will come in as annual payments. The annual payment will be Rs 4.11 crore and will be raised by 25 per cent every five years," said disinvestment secretary Pradip Baijal.

As upfront payment, the government will get 50 per cent of the total minimum guaranteed annual payment (MGAP) it would have got over 30 years, discounted at 12.5 per cent per annum.

Also, if the turnover of the hotel increases, 16.5 per cent of the gross turnover or the minimum guaranteed annual payment (MGAP) will have to be paid every year to the government, Baijal added.

While the Agra property went to Mssrs Mohan Singh, the Madurai property went to Sangu Chakra Hotels Pvt Ltd.

The Bodh Gaya property was sold to Lotus Nikko Hotels, the Hassan property to Malnad Hotels and the Mamallapuram property went to GR Thangamaligai Pvt Ltd.

The ITDC disinvestment process faced some last minute wrinkles, which were sorted out only late last night.

The demerger of the Agra and Mamallapuram properties was opposed by the department of company affairs on the grounds that all the creditors had not given their consent for demerger.

However, last minute manoevering by the disinvestment ministry ensured that the decision was altered.

The disinvestment ministry aruged that not only is the government exempt from getting compliance from creditors, but also, under Section 620 of the Companies Act, it can waive the requirement. Also, since a majority of the creditors had favoured demerger there was no need to hold up the disinvestment process, the ministry added.