Indian Hotels Rights Issue Offer
Indian Hotels is making unlinked offers of equity shares (one for every five held) and 6 per cent NCDs (non-convertible debentures) with a detachable warrant (one for every 10 shares held). The equity shares are being offered at Rs 70 per share, a steep 35 per cent discount to the current market price. Shareholders can subscribe to the equity portion of the rights offer floated by Indian Hotels, owner of the Taj Group of hotels. They can take advantage of the discount and reduce their average acquisition cost. They may also consider selling a portion of their present holdings in the open market to ensure that their overall exposure to the stock does not increase.
The proceeds of the offer will fund Indian Hotels’ massive capacity expansion plans. About Rs 300 crore will be invested in developing two hotels in Coimbatore and Bangalore, to come up in December 2009 and April 2009 respectively and in adding another 140 rooms to Taj Lands End in Mumbai. Another Rs 340 crore will be invested in its domestic and international subsidiaries. The investment in the overseas subsidiary is mainly going towards the $80 million renovation of “The Pierre”, the New York property acquired in 2006. The renovated property will re-open in January 2009.
Indian Hotels continues to expand in India and internationally. Besides the ones being funded by the offer, another six properties are expected to open over the next two years. More properties are likely to be opened by its subsidiaries and associates as well. The expansion could scale revenues considerably, if the Taj Group can hold on to its market share.
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Comments
Even though u made a fuss over the Right issue We are sorry to inform you that the forms of Rights as well as NCD!s were not sent to us by the Intime Spectrm Registering ltd depriving us the previllage of Rights. They sent us letter dated 14 April 2008 informing the date of closure of the issue. I am holding 750 shares for a decade and I feel decieved. I am making a seperate complaintto SEBI and CNBC 18 about the deception. One Ms.Silpa was supposed to be contacted at Intime Spectrum. We tried 100 times wbut without result. Pl.do the needful
Dr.Badgujar Demat Ac/10557100
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