IHC to raise Rs 1,900cr for buyouts, expansion

Indian Hotels Company Ltd will raise up to Rs 1,900 crores through two rights issues for business expansion and "possible acquisitions". The board of directors has decided to make a rights offer of two simultaneous but unlinked issues to the shareholders of the company, according to the information given to the National Stock Exchange.
The objective of these two issues are to meet the company’s long-term financing needs for capital expenditure and growth plans, including possible acquisitions, it said. The company could raise between Rs 900 crores to Rs 1,080 crores. The company had recently said that it has continued to pursue an aggressive growth agenda and was building new 5-star hotels in Mumbai, Coimbatore, Bangalore besides renovating the Falaknuma Palace in Hyderabad and expanding capacity at Lands End in Mumbai. Ginger hotels were under construction at seven locations across India. Mr Raymond Bickson, MD, India Hotels, said: "The company has continued to scout for opportunities for growth in key international destinations."
The hotel major said in its notice to the NSE that it plans to offer rights issue of equity shares in the ratio of 1:5 at a price of Rs 70 per share aggregating Rs 844 crores. It would also offer rights issue in the ratio of 1:10 of a five-year four per cent of unsecured convertible debentures. They would have a face value in the range of Rs 150 to Rs 180. These debentures can be converted into shares after two years at a price in the range of Rs 150-180.
The exact terms of this convertible debentures issue would be determined at the time when the issue is actually to be made the notice said. Depending on these terms, the amount involved would range from Rs 900 crores to Rs 1,080 crores, the company said. These rights issues would be subject to necessary approvals as may be required, the company said.