East India Hotels (EIH) Ltd, a Kolkata-based hospitality firm and the owner of Oberoi Group of hotels, is acquiring 45.85% stake of its joint venture partner in EIH Holdings Ltd for $45 million. EIH Holdings is its international hotel joint venture company where Amex Investment Ltd of Hongkong holds 45.85% stake.
The company plans to acquire the partner’s stake through its wholly owned subsidiary EIH International Ltd in British Virgin Islands, it said in a statement. EIH has already signed a letter of intent with the principal shareholder of Amex for the buy. The transaction is subject to formal and regulatory approvals.
The joint venture made investments in hotels in Mauritius, Indonesia and also has hotel management contracts in various countries. It made equity investments in existing Oberoi hotels in Mauritius, Indonesia, and Sahl Hasheesh resort in Egypt.
Post this acquisition, these assets will be entirely owned by EIH Ltd through its subsidiary EIH International Ltd, the statement added.
EIH, which currently runs the Oberoi and Trident brand of hotels, is planning its expansion in international markets. It plans to enter into long term global licensing agreement through EIH Holdings Ltd under which it will hold exclusive rights to use the Oberoi and Trident brands globally.
The shares of EIH were traded at Rs 126.70, up by Rs 2.25 or 1.81% at 11:50 am in the Bombay Stock Exchange today. The net revenue of the company in FY 2009 was Rs 1,073 crore, as compared with Rs 1,155 crore a year ago. Net profit was Rs 170 crore as compared with Rs 217 crore.