Singapore's sovereign wealth fund GIC will take 35% stakes in three individual units of SAMHI Hotels for a total investment of 7.52 billion rupees ($88 million), as part of a joint plan to develop upscale hotels in India.
The three units - SAMHI JV Hotels, Ascent Hotels, and Inmar Tourism and Hotel - together operate four hotels in the Indian cities of Bengaluru and Pune, with two of the hotels Marriott-branded and one more hotel still under construction, the Indian hotelier said on Thursday.
SAMHI said that out of GIC's total investment, 6.03 billion rupees will be majorly used towards scaling down SAMHI's debt - which some analysts have flagged as higher than peers.
Brokerage Prabhudas Lilladher, earlier this week, had said that over the next three years, SAMHI's net debt to core profit would still be higher than other hoteliers with debt, such as Chalet Hotels and Lemon Tree Hotels.
The company, whose debt as of 2024-end stood at 20.64 billion rupees, expects the deal to trim it by 5.8 billion rupees.
Once the deal closes, SAMHI JV will become debt free and Ascent will be left with a debt of roughly 2 billion rupees, SAMHI's Chief Executive Ashish Jakhanwala said in an analyst call.
The plan clears investor concerns around SAMHI's debt pile, Prabhudas Lilladher analyst Jinesh Joshi said. The company's shares were last trading 10% higher.
The $88 million deal is a part of a joint plan to create a $300 million venture aimed at developing upscale hotel assets in India - wherein GIC holds 35% share and SAMHI retains 65%.
The joint venture's focus will be to tap "acquisition and turnaround" opportunities in the urban business hotels segment, Jakhanwala added.
