Private equity (PE) giant Warburg Pincus is seen in discussions with Kerala’s leading luxury resort operator Casino Group to invest Rs 300-325 crore, sources said. The Kochi-based Casino Group of Hotels (CGH), a five decade-old family run business operating 12 environment-friendly resorts, is looking at raising capital for its expansion plans, both domestic as well as overseas.
The fund interest has been growing in Kerala’s top draw leisure sector, but this is the first time a bulge bracket global PE is seen in talks to cut a deal. Arguably the best known name in Kerala’s hospitality sector, Casino Group, operating under CGH Earth brand, is believed to have attracted robust private equity interests as it plans to hit the market with fund raising plans.
While sources confirmed discussions with Warburg, they said most of the PE biggies would show up to buy into top dollar leisure assets in Kerala. The Dominic family, which entered the hospitality sector in 1954, owns 100% of the company. It is believed that the family may divest up to 20% for raising the funds valuing the business closer to Rs 1,600 crore ($400 mn).
“They are talking to A-lister like Warburg as it may further their overseas ambitions. But there could be others, at least two more, flashing their interest,” said a source. “We believe they may go in for a formal process with an investment bank. We reckon most of the top names will be taking a look at the proposal for certain,” a fund manager, focused on hospitality vertical, added.
When contacted, CGH MD Jose Dominic said, “We have not yet firmed up plans on funding for expansion purposes as yet. It could be the PE or debt route.”
Source: Economic Times