Oberoi Hotels is fast expanding in India, Abu Dhabi, Maldives, Cambodia and Dubai, some through management contracts and some through its own equity worth about Rs 500 crore.
With such expansion plans Oberoi's would need the extra cash. They have already hired Kotak Mahindra to help them raise Rs 400 crore via debt and fresh equity.
But the company is also open to roping in a strategic financial investor like a private equity fund.
“We are open to the idea, but at the opportune time and it will have to be something that suits both parties,” said P.R.S. Oberoi, Chairman, Eastern India Hotels.
Management contracts
The investments are likely to happen project by project in the new hotels. Sources say GIC of Singapore, AXA's realty arm and Macquarie Bank have already met the Oberoi's top brass to explore tie-ups, a fact the management denies. This is after a deal with Merill Lynch fell through at the last minute.
“We have management contracts already at project levels, that's an easy extension isn't it. And I prefer to buy and not buy for the heck of it,” said P.R.S.Oberoi, Chairman, EIH Ltd.
Will Oberoi hive off its real estate valued roughly at Rs 10,000 crore, sell it and lease it back again? Maybe in future, as each property gets diversified into shopping centres and service apartments.
The leisure segment contributes 22 per cent of the total revenues but the group is betting on the hospitality business in the new green field airports in Mumbai, Kolkata and Delhi. A JV with L&T is on for the Bangalore international airport but the company will be bidding for more.
Source : NDTV Profit